Translation: Plain Language Blockchain
In 1688, captains gathered at Edward Lloyd's Coffee House in London to find those willing to insure their voyages. Wealthy merchants would sign below the ship's details, becoming 'underwriters' and using personal wealth to guarantee these high-risk voyages.
The more reputable the underwriter, the higher the safety of the entire voyage. The safer the system, the more business it attracts. It's a simple transaction: provide capital, lower everyone's risk, and gain profit-sharing.
Reading the new guidance from the U.S. Securities and Exchange Commission (SEC), it is clear that cryptocurrency is simply digitalizing the model invented by café underwriters—people earn returns by putting assets at risk, making the entire system safer and more trustworthy.
Staking. Yes, it's back.
On May 29, 2025, everything changed. On that day, the U.S. government made it clear that staking would not land you in legal trouble. First, let's recap why this is so important right now.
In staking, you lock up tokens to help secure the network and earn stable returns.
Validators use staked tokens to validate transactions, propose new blocks, and keep the blockchain running smoothly. In return, the network pays them with newly minted tokens and transaction fees.
Without stakers, proof-of-stake networks like Ethereum would collapse.
Of course, you can stake tokens, but no one knows if the SEC will one day come knocking, claiming you are conducting an unregistered securities offering. This regulatory uncertainty keeps many institutions on the sidelines, enviously watching retail stakers earn 3-8% annualized returns.
The Great Staking Boom
On July 3, Rex-Osprey Solana + Staking ETF officially launched, becoming the first fund in the U.S. to offer direct cryptocurrency exposure and include staking rewards. The fund holds SOL through a Cayman subsidiary and uses at least half of its holdings for staking.
"The first staking crypto ETF in the U.S.,” announced Rex Shares.
They are not the only ones.
Robinhood has just launched crypto staking services for U.S. customers, initially supporting Ethereum and Solana. Kraken has increased Bitcoin staking through the Babylon protocol, allowing users to earn rewards while holding BTC on the native chain.
VeChain launched a $15 million StarGate staking program. Even Bit Digital has abandoned its entire Bitcoin mining business to focus on Ethereum staking.
What has changed now?
Two Major Regulatory Breakthroughs
First, the SEC's May 2025 staking guidance.
It clearly states that if you stake your cryptocurrency to help run the blockchain, it is completely legal and not regarded as a high-risk investment or security.
This covers personal staking, delegating tokens to others, or staking through trusted exchanges, as long as your staking directly supports the network. This will exclude most staking activities from the definition of 'investment contracts' in the 'Howey test'. It means you no longer need to worry about accidentally violating complex investment regulations by staking and earning rewards.
The only caveat is that anyone promising guaranteed profits, especially by mixing staking with lending, or using flashy terms like 'DeFi bundled guaranteed returns' or 'yield farming', may raise red flags.
Second, the CLARITY Act.
This is a bill introduced in Congress aimed at clarifying which government agency is responsible for regulating different digital assets. It specifically protects those who run nodes, stake, or use self-custody wallets, ensuring they are not regarded as Wall Street brokers.
The bill introduces a new category of digital commodities called 'investment contract assets' and establishes standards for digital assets as securities (regulated by the SEC) or commodities (regulated by the CFTC). The bill also sets a process for the 'maturity' of blockchain projects or tokens, allowing them to transition from SEC oversight to CFTC oversight, and sets a time limit for SEC reviews to avoid indefinite delays.
So, what does this mean for you?
Now, you can stake cryptocurrency in the U.S. with more confidence, thanks to the SEC's guidance. If the CLARITY Act passes, staking and participation in cryptocurrency will become simpler and safer.
Staking rewards still need to be taxed as ordinary income when you gain 'dominion and control', and if you later sell the rewards for a profit, you will have to pay capital gains tax. All staking income, regardless of the amount, must be reported to the IRS.
Who is in focus? Ethereum.
No, the price is still around $2500.
@Beeple
The price may not be stunning, but Ethereum's staking data shows significant changes. The amount of staked ETH has hit an all-time high of over 35 million, accounting for nearly 30% of the total supply. Although this trend has continued for months, these infrastructures have suddenly become more important.
@Dune
What's happening in the corporate boardroom?
BitMine Immersion Technologies just raised $250 million to buy and stake Ethereum, with Fundstrat's Tom Lee serving as its chairman. The company bets that staking rewards combined with potential price appreciation will outperform traditional treasury assets.
SharpLink Gaming is doubling down on this strategy, expanding its ETH treasury to 198,167 tokens and staking 100% of its holdings. Just in one week of June, they earned 102 ETH in staking rewards. Just lock up your tokens and earn free capital.
Meanwhile, Ethereum ETF issuers are queuing up for staking approval. Bloomberg analysts predict a 95% chance of staking ETFs getting regulatory green lights in the coming months. BlackRock's head of digital assets called staking a 'major transformation' for Ethereum ETFs, and he might not be wrong.
If approved, these staking ETFs could reverse the outflows that have plagued Ethereum funds since their launch. Since you can gain both price exposure and income simultaneously, why settle for just price exposure?
@VitalikButerin
Cryptocurrency speaks in Wall Street's language
For years, traditional finance has struggled to understand the value proposition of cryptocurrencies. Digital gold? Maybe. Programmable money? Sounds complex. Decentralized applications? What's wrong with centralized applications?
But returns? Wall Street understands returns. Of course, bond yields have rebounded from near-zero lows in 2020, with one-year treasury yields around 4%. But a regulated crypto fund that can generate 3-5% annualized staking returns while providing potential upside for the underlying asset? That looks very attractive.
This is about legitimacy. When pension funds can buy Ethereum exposure through a regulated ETF and earn returns by securing the network, it is a big deal.
Network effects are already showing. As more institutions participate in staking, the network becomes more secure. The more secure the network, the more users and developers it attracts. As adoption increases, transaction fees rise, and staking rewards grow as well. It's a virtuous cycle that benefits all participants.
You don't need to understand blockchain technology or believe in decentralization to appreciate an asset that pays you for holding it. You don't need to subscribe to Austrian economics or distrust central banks to appreciate a productive capital. You just need to understand that networks need security, and those who provide security ought to be compensated.
That's it for today. See you next week for another in-depth discussion.
By then... hold tight.
