Cardano Founder: ADA Staking Is Not a Security, Following SEC's Latest Update

Charles Hoskinson, founder of Cardano and CEO of Input Output Global, has firmly stated that ADA staking does not qualify as a security — directly addressing recent commentary from the SEC’s Division of Corporation Finance regarding liquid staking.

The SEC defined liquid staking as the process of staking crypto through a service provider or protocol, where users receive a tokenized receipt representing the staked assets and potential rewards.

However, Cardano’s staking model is fundamentally different. It is a native feature of the blockchain’s consensus layer, allowing ADA holders to delegate their tokens to staking pools — without transferring ownership or expecting profits purely from others’ efforts.

Hoskinson emphasized that ADA staking does not meet the criteria of the Howey Test, which the SEC uses to define securities. Users aren’t investing in a “common enterprise” or relying solely on others for profits — they're participating in network security and earning passive rewards.

🔹 Project Crypto Making Waves

This comes in the wake of the SEC’s newly launched Project Crypto, aimed at updating securities regulations for an on-chain financial future. Within days of launch, Chairman Paul Atkins noted progress, highlighting the agency’s clarification on staking.

He assured that under his leadership, the SEC remains focused on clearer guidance for how securities laws apply to new technologies like blockchain and DeFi.

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