The U.S. Securities and Exchange Commission (SEC) is under fire from both current and former officials regarding its updated position on crypto staking services. On May 29, the SEC's Division of Corporation Finance issued guidance indicating that certain staking offerings may not qualify as securities, exempting specific proof-of-stake blockchains from registration under the Securities Act. John Reed Stark, a former chief of Internet Enforcement, pointed out that this interpretation contradicts several federal court decisions. He stated on X that the SEC’s recent actions represent a clear deviation from established judicial findings involving Binance and Coinbase, where judges allowed allegations that staking products fit the criteria of securities. Stark characterized the SEC's decision as a troubling retreat from its duty to protect investors.
Alongside Stark’s comments, sitting Commissioner Caroline Crenshaw voiced concerns that the SEC's analysis does not align with existing legal precedents. She suggested the agency’s current assessment reflects its aspirations rather than actual law, criticizing it for acting as if the law could change without fully observing current statutes.
Critics also mention the SEC has been actively deregulating aspects of the crypto industry by dropping investigations and launching dialogues with stakeholders. Stark lamented that this trend has eroded the SEC's historical reputation. Crenshaw emphasized the inconsistencies in the SEC's stance, questioning why some cryptocurrencies are deemed securities in certain contexts but not in others. In defense, Commissioner Hester Peirce noted that the status of a security often depends on the context of transactions over the asset itself. She remarked on the necessity for clearer guidance around trading crypto assets that may complicate the regulatory landscape.
Alongside Stark’s comments, sitting Commissioner Caroline Crenshaw voiced concerns that the SEC's analysis does not align with existing legal precedents. She suggested the agency’s current assessment reflects its aspirations rather than actual law, criticizing it for acting as if the law could change without fully observing current statutes.
Critics also mention the SEC has been actively deregulating aspects of the crypto industry by dropping investigations and launching dialogues with stakeholders. Stark lamented that this trend has eroded the SEC's historical reputation. Crenshaw emphasized the inconsistencies in the SEC's stance, questioning why some cryptocurrencies are deemed securities in certain contexts but not in others. In defense, Commissioner Hester Peirce noted that the status of a security often depends on the context of transactions over the asset itself. She remarked on the necessity for clearer guidance around trading crypto assets that may complicate the regulatory landscape.
