🔵 Cardano Founder Asserts: $ADA Staking Not a Security
Charles Hoskinson, CEO of Input Output and founder of Cardano, has firmly stated that ADA staking does not qualify as a security, responding to fresh guidance from the SEC’s Division of Corporation Finance on liquid staking.
The SEC defined liquid staking as staking crypto via a third-party provider or protocol and receiving a tokenized receipt representing the staked asset and potential rewards.
Cardano operates differently — its staking mechanism is built into its core consensus layer. ADA holders delegate tokens to staking pools, earning rewards for helping secure and validate the network.
Hoskinson emphasized that Cardano’s staking model doesn’t satisfy the Howey Test, the legal standard used to identify securities. ADA holders aren’t making an investment in a “common enterprise” or expecting returns “solely from the efforts of others.” Instead, they passively contribute to network operations and get compensated for that service — not as part of any centralized profit scheme.
🔸 SEC’s Project Crypto Already Making Waves
The clarification on liquid staking comes shortly after the SEC launched Project Crypto, aimed at updating financial market rules and moving toward on-chain finance.
Chairman Paul Atkins noted that progress is already visible. The recent guidance on staking is one example of the SEC’s commitment to clear, updated rules for digital finance and new technologies.
