Article author: Thejaswini M A
Article translated by: Block unicorn
Preface
In 1688, captains would gather at Edward Lloyd's coffeehouse in London to find those willing to insure their voyages. Wealthy merchants would sign under the ship's details, becoming 'underwriters,' using their personal wealth to guarantee these high-risk voyages.
The better the underwriter's reputation, the safer it is for everyone. The safer the system, the more business it attracts. It’s simple: provide capital, lower the risk for everyone, and then take a profit share.
Reading the SEC's new guidance makes it clear that cryptocurrency is merely the digitization of the mechanism invented by café underwriters—people earning returns by putting assets at risk, thereby making the whole system safer and more trustworthy.
Staking. Yes, it’s back on the agenda.
On May 29, 2025, everything changed. On this day, the U.S. government made it clear that staking would not land you in legal trouble. First, let’s review why this is so important now.
In staking, you can lock up your tokens to help protect the network and earn stable rewards.
Validators use their 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 your tokens, but no one knows if the SEC will one day come knocking, claiming that you are conducting an unregistered securities offering. This regulatory uncertainty has left many institutions on the sidelines, enviously watching retail stakers earn annualized returns of 3-8%.
The Great Staking Boom
On July 3rd, the Rex-Osprey Solana + Staking ETF was launched, becoming the first fund in the U.S. to offer direct cryptocurrency investment and staking rewards. It 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.
And they are not alone.
Robinhood has just launched cryptocurrency staking services for U.S. customers, initially supporting Ethereum and Solana. Kraken has added Bitcoin staking through the Babylon protocol, allowing users to earn BTC yields while keeping their native chain.
VeChain has 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 regulatory dominoes
First, the staking guidance released by the U.S. Securities and Exchange Commission (SEC) in May 2025.
It indicates that if you stake your cryptocurrency to help run the blockchain, it is perfectly fine and is not considered a high-risk investment or security.
This covers individual staking, delegating your tokens to others, or staking through a trusted exchange, as long as your staking directly helps the network. This will exempt most staking activities from the 'investment contract' definition under Howey tests. This means you no longer need to worry about accidentally violating complex investment laws just by staking and earning rewards.
The only danger sign here is when someone promises guaranteed profits, especially when mixing staking with lending.
or when issuing fancy terms like DeFi bundled products, guaranteed returns, or yield farming.
Next up is the (CLARITY Act).
This is a law proposed in Congress aimed at clarifying which government agency is responsible for different digital assets. It is specifically designed to protect those who only run nodes, stake, or use self-custody wallets from being treated like Wall Street brokers.
It introduces the concept of 'investment contract assets,' a new category of digital commodities, and establishes standards for determining when digital assets are considered securities (regulated by the SEC) or commodities (regulated by the CFTC). The bill sets procedures for determining when blockchain projects or tokens 'mature' and can shift from SEC to CFTC oversight, and establishes time limits for SEC reviews to prevent indefinite delays.
So, what does this mean for you?
Thanks to the SEC's guidance, you can now stake your cryptocurrency in the U.S. with more confidence. If the (CLARITY Act) passes, everyone looking to stake or engage in cryptocurrency will have a more convenient and secure experience.
Staking rewards are still taxed as ordinary income when you gain "dominion and control," and if you later sell the rewards for a profit, you will owe capital gains tax. All staking income, regardless of the amount, must be reported to the IRS.
Who is in the spotlight? Ethereum.
No, it's still around $2,500.
Price performance is mediocre, but Ethereum's staking metrics reflect change. The amount of staked ETH just hit an all-time high, exceeding 35 million coins, nearly 30% of the total circulating supply. Although this infrastructure build-up has been ongoing for months, it has suddenly become particularly important.
What’s happening in corporate boardrooms?
BitMine Immersion Technologies has just raised $250 million to buy and stake Ethereum (ETH), with the company chaired by Tom Lee of Fundstrat. Their strategy is to bet that staking rewards plus potential price appreciation will outperform traditional treasury assets.
SharpLink Gaming has further deepened this strategy by expanding its ETH reserves to 198,167 tokens and using its entire holding for staking. Just in one week of June, they earned 102 ETH in staking rewards. Locking up tokens can yield 'free money.'
Meanwhile, Ethereum ETF issuers are lining up for staking approval. Bloomberg analysts predict a 95% chance of staking ETFs gaining regulatory approval in the coming months. The head of digital assets at BlackRock called staking a 'huge advancement' for Ethereum ETFs, and he may be right.
If approved, these staking ETFs could reverse the outflow of funds that has plagued Ethereum funds since their launch. Why settle for price exposure when you can get both price exposure and yield?
Cryptocurrency speaks Wall Street's language
For years, traditional finance has struggled to understand the value proposition of cryptocurrency. Digital gold? Maybe. Programmable money? Sounds complicated. Decentralized applications? What’s wrong with centralized applications?
But what about yields? Wall Street understands yields. Indeed, bond yields have rebounded from near-zero lows in 2020, with one-year U.S. Treasury yields rising to around 4%. But a regulated cryptocurrency fund that can generate 3-5% annualized staking rewards while also offering potential upside on the underlying asset is incredibly enticing.
Legitimacy is crucial. When pension funds can buy Ethereum exposure through regulated ETFs and earn rewards by securing the network, it's a big deal.
The network effects have begun to show. As more and more institutions participate in staking, the network becomes more secure. As the network becomes more secure, it attracts more users and developers. With the increase in adoption, transaction fees will also rise, thereby enhancing staking rewards. This is a virtuous cycle that benefits all participants.
You don’t need to understand blockchain technology or believe in decentralization to appreciate an asset that earns returns for holding it. You don’t need to believe in Austrian economics or distrust central banks to value an asset as productive capital. You just need to understand that networks need security, and participants who provide security deserve to be rewarded.
