Everstake Challenges SEC on Crypto Staking

The US Securities and Exchange Commission (SEC) is engaging with Everstake, a leading global non-custodial staking provider, to clarify the regulatory landscape of blockchain staking. This follows recent SEC actions against other staking providers and highlights the ongoing uncertainty around the legal classification of staking in the US.

Everstake's Position on Non-Custodial Staking

Everstake maintains that non-custodial staking shouldn't be categorized as a securities transaction. They emphasize that users retain complete control of their digital assets throughout the process, unlike custodial models. This, they argue, makes staking a technical function rather than an investment product. Everstake founder Sergii Vasylchuk stated, “Our main assertion is that staking is not a financial instrument or security transaction, but rather a technical process…that maintains the integrity and functionality of decentralized networks.”

Key arguments presented by Everstake include:

• Users maintain full control of their assets.
• No transfer of ownership to a third party.
• Staking is a technical function, not an investment.

A letter submitted to the SEC’s Crypto Task Force on April 8, 2025, further detailed Everstake’s position, emphasizing that non-custodial staking fails the Howey Test. The Howey Test, a standard used to determine whether an investment is a security, considers factors such as investment of money, common enterprise, expectation of profits, and reliance on the efforts of others. Everstake argues that non-custodial staking meets none of these criteria.

Regulatory Clarity and the Howey Test

Everstake’s letter proposed criteria for exempting non-custodial staking from securities classification, including user asset control, the absence of pooled funds, permissionless unstaking, and the provision of purely technical services. They liken it to proof-of-work mining, which the SEC has previously excluded from securities classification.

Margaret Rosenfeld, Everstake’s chief legal officer, added, “With non-custodial staking, there’s no handover of assets, no investment contract, and no third-party risk. Treating it as a securities offering undermines the decentralized model and risks chilling innovation in the blockchain sector.”

While the SEC hasn't issued a definitive stance, they are actively engaging with stakeholders across the crypto ecosystem to gather input, including those involved in non-custodial staking and ETFs.

Industry Calls for Regulatory Clarity

The uncertainty surrounding crypto staking prompted a letter from nearly 30 crypto advocacy groups, led by the Crypto Council for Innovation (CCI), urging the SEC for clear regulatory guidance on crypto staking and related services. This underscores the industry’s need for well-defined rules to foster innovation and protect investors.

Codeum, a leader in blockchain security and development, provides essential services including smart contract audits, KYC verification, and custom smart contract and DApp development, to help navigate this evolving regulatory landscape.