The SEC has clarified that solo, delegated, and custodial staking linked to a network's consensus process are not considered securities offerings. According to the May 29, 2025 guidelines, rewards from network validation are viewed as compensation for services rather than profits from others' efforts, thus exempting them from the Howey test. This regulatory clarity allows validators, node operators, and stakers to engage without fear of legal repercussions, promoting broader adoption of Proof-of-Stake (PoS) networks. However, yield farming and certain DeFi products remain outside legal bounds. The SEC's guidance distinguishes legitimate protocol staking from schemes promising returns from others' efforts. It permits solo staking, non-custodial delegated staking, and custodial staking under specific conditions. The guidelines aim to support various stakeholders in the PoS ecosystem, including validators and custodial service providers, while ensuring compliance. This framework encourages institutional participation and innovation in staking services, fostering a more secure and decentralized blockchain environment. Read more AI-generated news on: https://app.chaingpt.org/news

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