Everstake Advocates for Regulatory Clarity on Non-Custodial Staking in Discussions with SEC

• Everstake’s recent dialogue with the SEC’s Crypto Task Force highlights the complexities surrounding non-custodial staking and its regulatory implications.

• This meeting underscores the urgency for clearer regulatory frameworks as over $193 billion is at stake across various proof-of-stake networks.

• During this meeting, Everstake reinforced the position that non-custodial staking is a technical mechanism rather than a security transaction, as stated by founder Sergii Vasylchuk. “Staking maintains the integrity of decentralized networks,” he emphasized.

Everstake advocates for clearer SEC guidelines on non-custodial staking, arguing it shouldn’t be classified as a security transaction amidst a $193 billion staking surge.

Everstake Calls for Regulatory Clarity in Staking

In a significant move for the crypto industry, Everstake submitted a detailed letter to the SEC’s Crypto Task Force on April 8, 2025, seeking regulatory clarity for non-custodial staking models. The firm responded to Commissioner Hester Peirce’s initiative for public input on the regulation of blockchain technologies, asserting that non-custodial staking should not be classified alongside traditional securities.

Everstake articulated its position by stressing that non-custodial staking allows users to retain control of their digital assets. Unlike traditional investment offerings, this model does not involve the pooling of assets or the expectation of profits derived from managerial efforts. The staking rewards, as Everstake pointed out, arise directly from the blockchain network’s algorithmic functions rather than from the company’s actions.

Detailed Arguments on Non-Custodial Staking’s Legal Status

As part of their argument, Everstake posited that non-custodial staking does not meet the criteria set forth by the Howey Test, which determines if certain transactions qualify as investment contracts. Users participating in non-custodial staking do not invest money into a common enterprise—they merely delegate validation rights while maintaining ownership of their assets. Hence, they are not exposed to the managerial efforts of Everstake or expecting profits from the entity.

The rewards from non-custodial staking are solely derived from network-level incentives and are contingent on the asset’s market value fluctuations. Everstake has proposed specific criteria that could exempt non-custodial staking from being classified as a security, emphasizing asset control, lack of pooled funds, permissionless unstaking, and the provision of purely technical services.

Comparative Analysis with Proof-of-Work Systems

Everstake has likened non-custodial staking to proof-of-work mining, which the SEC has previously ruled out as a securities transaction. This comparison aims to advocate for a consistent regulatory approach across different blockchain mechanisms. In a statement, Margaret Rosenfeld, Everstake’s Chief Legal Officer, noted, “There’s no transfer or handover of assets in non-custodial staking, which makes it fundamentally different from traditional securities models.”

The SEC’s Ongoing Evaluation of Staking Models

The SEC remains in a deliberative phase regarding its official stance on non-custodial staking. Though no definitive guidelines have been provided, the agency continues to engage with stakeholders, underscoring its openness to feedback from various sectors, including those involved with decentralized staking. This aligns with a broader push from almost 30 crypto advocacy groups, led by the Crypto Council for Innovation (CCI), urging the SEC for clearer staking regulations.

Conclusion

As the regulatory landscape for crypto continues to evolve, the discussions surrounding non-custodial staking are pivotal. The arguments put forth by Everstake reinforce the need for clarity and consistent application of laws to promote innovation while ensuring compliance. The future of staking in the U.S. may very well depend on the outcomes of these dialogues. By clearly delineating non-custodial staking from securities classifications, regulatory frameworks can foster a healthier environment for blockchain innovation.