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- Crypto leaders urge the SEC to offer clear rules for staking services.
- The letter says staking is a technical process, not an investment.
- The industry wants simple, transparent, and user-focused guidance.
Nearly 30 cryptocurrency organizations have come together to seek regulatory clarity. Their message targets the U.S. Securities and Exchange Commission (SEC). The group, led by the Crypto Council for Innovation (CCI), submitted a letter through its Proof of Stake Alliance (POSA).
They are calling on the SEC to clarify where exactly staking and staking services would fall under U.S. securities laws. The letter was sent personally to SEC Commissioner Hester Peirce. The letter was prompted by her request to receive public comments regarding the matter. The crypto group contends that staking is a technical move rather than a financial investment.
They feel that it shouldn’t be subject to treatment like that of securities. Their appeal is for an explicit, principle-based framework rather than strict rules that would destroy the industry. They noted that staking secures blockchain networks. It protects them and keeps them running. Treating it as a security would destroy innovation and make America less competitive as a country.
Staking Strengthens PoS Blockchains
Staking is critical in proof-of-stake blockchain. Individuals lock some of their coins and utilize them to aid in validating transactions. This secures and fortifies the network. The system rewards them accordingly. Most of them depend on staking providers.
Self-custodial platforms, custodial exchanges, and liquid staking platforms belong to them. The service providers make staking easily available and convenient. But they do not control the returns or outcomes. The letter argues that staking does not measure up to the legal standard of security. The funds remain in the custody of the user.
The blockchain allocates rewards, and not the provider. The providers sell a service and not an investment. They do not guarantee returns or make investment decisions on behalf of users. The coalition further raised that liquid staking tokens do not behave as stocks or bonds. They signify ownership of staked assets and not entitlement to profits.
SEC Should Provide Fair and Consistent Rules
The group wants equitable and uniform rules from the SEC. Neither do they request an exception. What they desire is the appropriate kind of oversight. This means transparent disclosure, public auditing of smart contracts and simple language to users.
They further clarified responsible staking principles. These involve candid returns, transparent fee structures, and complete control by users of their assets. The rules, according to them, will safeguard users without hindering innovation.
Other nations have already gotten ahead of this. The U.S. is at risk of falling behind unless it acts. The group’s mission is to promote robust networks, safeguard users, and keep America competitive. It believes explicit, pragmatic rules of staking can bring about all three.
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