Industry Leaders Call on SEC to Define Rules for Crypto Staking

The organization is a collection of more than thirty crypto firms that lobby public institutions for better regulation of the industry.

The Crypto Council for Innovation (CCI) has urged the U.S. Securities and Exchange Commission (SEC) to set forth rules for crypto staking.

Its letter, written on Wednesday, comes as the SEC faces a lawsuit from the industry group over its handling of cryptocurrency regulation.

The organization, which counts more than thirty members, is focused on pushing for better regulation of the industry.

The term ‘staking’ refers to a technical process used to secure blockchains, much like proof-of-work mining.

Ranging from exchanges and DeFi protocols to asset managers and blockchain companies, CCI members are at the forefront of the industry.

In the letter, the CCI highlights that other jurisdictions, such as Canada and the United Kingdom, have already provided clarity on the issue of staking.

The SEC itself issued a statement on mining in March. And now, the CCI is seeking a similar statement addressing the treatment of staking activities.

“Staking is not an investment activity,” the letter says. “Stretching the outer bounds of the securities laws to cover such services would be inappropriate.”output: Industry leaders, united within the Crypto Council for Innovation (CCI), are urging the U.S. Securities and Exchange Commission (SEC) to define the rules for crypto staking.

In a letter to the SEC, viewed by Blockworks, the trade association for open-chain technology, requests the regulator to provide clear guidance on staking and related services.

The organization, which counts more than thirty members, is focused on pushing for better regulation of the industry. Its members include major cryptocurrency exchanges Coinbase and Kraken, stablecoin issuer Circle, and giant asset manager Fidelity Investments.

The term ‘staking’ refers to a technical process used to secure blockchains. Users validate transactions and secure the network in exchange for rewards that are issued based on the amount of cryptocurrency participants’ ‘stake’ on the network.

The CCI argues that such services are not investment activities and should not be regulated as such.

“Other jurisdictions, such as Canada and the United Kingdom, have already provided clarity on the issue of staking,” the letter reads. “The Commission itself issued a statement on mining in March.”

The industry group requests that the SEC issue a similar statement summarizing its views on how U.S. securities law applies to crypto staking services.

“We urge the Commission to provide clear guidance to the industry on the treatment of staking services under the federal securities laws,” concludes the letter.