On May 29, 2025, the Corporate Finance Department of the US Securities and Exchange Commission (SEC) issued a statement clarifying its views on whether "Protocol Staking" constitutes a securities issuance. This statement states that for networks using Proof of Stake (PoS) mechanisms, pledging native encrypted assets to participate in network consensus and receive rewards, if it only involves proprietary pledging, direct authorization to third-party node operators, or pledging on behalf of users by custodians, and these services are essentially "administrative or transactional operations" and do not involve "entrepreneurial or managerial efforts provided by others", it does not constitute securities issuance or trading as defined in the 1933 Securities Act or the 1934 Exchange Act and does not require registration. In addition, the statement also clarifies that auxiliary services related to protocol pledge (such as "reduction protection", "early unlocking", "reward distribution time difference", "asset aggregation", etc.) also belong to administrative services and do not constitute the "effort of others" standard under the securities requirement (Howey Test, item 3). The SEC's finance department therefore believes that these agreement pledge activities do not require registration and are not within the scope of securities regulation, unless they involve guaranteed returns, fixed returns, or asset reuse (such as deferred lending). This provides a clear compliance path for a compliant PoS staking model, which is beneficial for the healthy development of the industry. Speaking in person means that the SEC has explicitly stated that as long as it is a protocol pledge, such as pledging ETH to participate in consensus on the Ethereum network, it is not a securities issuance and does not require SEC approval or registration. This applies to three situations: 1. Run node staking by yourself 2. Authorize others to pledge for you (but you own the assets and private keys) 3. Hand over the assets to the custodian to pledge for you (the custodian does not take the initiative to operate, but only acts on your behalf) So for encrypted assets like ETH, protocol staking itself is not considered a securities activity by the SEC, so spot ETFs can legally engage in protocol staking (meeting the first three situations) without the need for additional SEC staking approval. This tweet is sponsored by @ ApeXProtocolCN | Dex With Apex