
Main Points:
- US regulators, led by the SEC, are considering formal guidance on crypto staking, including how proof-of-stake activities should be treated under securities laws.
- Industry groups such as Coin Center, the Blockchain Association, and POSA are urging the SEC for clear rules to support innovation and investment.
- Solana stakeholders warn that regulatory uncertainty may hinder Solana spot ETF approvals and broader network growth.
- The SEC has delayed decisions on multiple Solana ETF applications, extending public comment periods into July 2025.
- The IRS has taken a contrasting stance, treating staking rewards as taxable service income upon receipt.
- New SEC task force initiatives and IRS rule updates signal a shift toward more defined frameworks, but gaps remain that could shape the competitive landscape for US-based staking providers.
Industry Push for Clear Staking Rules
Over the past year, a coalition of crypto-focused organizations has pressed the Securities and Exchange Commission (SEC) for explicit guidance on staking activities. Groups including Coin Center, the Blockchain Association, and the Proof of Stake Alliance (POSA) argue that without a defined regulatory framework, projects engaged in staking face legal ambiguity that discourages network participation and investor confidence.
POSA’s central contention is that staking rewards represent compensation paid to blockchain validators for securing proof-of-stake networks, not the sale of a financial security. They urge the SEC to codify this distinction, fearing that indistinct rules could classify staking services or token rewards as unregistered securities offerings, exposing network operators and users to enforcement actions.
By clarifying the legal status of staking, industry advocates believe the SEC can:
- Promote healthy growth in proof-of-stake ecosystems.
- Reduce the risk-aversion that currently deters institutional and retail participants.
- Ensure US-based staking providers can compete globally without being forced to relocate to more permissive jurisdictions.
Solana and the ETF Approval Timeline
Solana (SOL), one of the leading proof-of-stake networks, finds itself at the intersection of these regulatory debates. In May 2025, several issuers—including Bitwise, 21Shares, Fidelity, VanEck, and Canary Capital—submitted proposals for spot Solana exchange-traded funds (ETFs). The SEC has since extended its review timelines and opened public comment periods, delaying decisions until early July 2025.
At the recent Solana Accelerate conference, industry veteran Robert Muir emphasized that the lack of staking guidance represents a “serious impediment to innovation” on the network. He noted that ETF reviewers scrutinize not only market demand and custodial arrangements but also the legal status of the underlying asset and any on-chain activities—such as staking—and that uncertainty in any of these areas could derail fund approvals.
Key developments affecting Solana ETF prospects include:
- Extended review deadlines: The SEC set new deadlines around July 6, 2025 for Bitwise and 21Shares applications.
- Public comment invitations: The SEC’s decision to solicit stakeholder input signals openness to industry perspectives but also invites further debate.
- Task force engagement: The SEC’s crypto task force, established earlier this year, is reportedly examining staking-related issues alongside other digital asset concerns.
Until the SEC issues formal guidance, Solana’s spot ETF applicants remain in regulatory limbo. Investors and issuers alike await clarification on whether staking components within the ETF structure (e.g., rolling staking rewards into fund NAV) would trigger securities compliance obligations.
The SEC’s Task Force and Evolving Dialogue
In an effort to address broad crypto uncertainties, the SEC launched a specialized “Crypto Task Force” led by Commissioner Hester Peirce. Since its inception, the task force has been tasked with:
- Reviewing existing rules to ensure they appropriately cover digital assets.
- Engaging in public outreach and comment solicitation.
- Identifying gaps where new interpretive guidance or rule-making may be necessary.
While the task force has not yet released formal staking guidelines, its recent activities suggest a more systematic approach to digital asset regulation than the earlier “regulation by enforcement” paradigm. Industry observers see this as a positive signal that the SEC may soon articulate:
- Whether staking service providers must register as broker-dealers or investment advisers.
- How token rewards should be characterized under the Howey Test.
- The treatment of node operators and custodial staking services.
However, the timeline for any concrete guidance remains unclear. Stakeholders expect initial interpretive letters or FAQs within 6–9 months, with potential rule proposals following based on task force findings.
IRS Taxation Policy on Staking Rewards
In parallel to SEC deliberations, the Internal Revenue Service (IRS) has taken a firmer stance on staking rewards from a tax perspective. Under IRS Revenue Ruling 2023-14, staking rewards are to be included in gross income as soon as the taxpayer has “dominion and control” over the tokens—regardless of whether they are mined directly on a blockchain or received via an exchange’s staking service.
Key points of the IRS position:
- Income recognition timing: Stakers must recognize fair market value of rewards on the date they become transferable.
- Reporting requirements: Taxpayers answer “Yes” to the digital asset question on Form 1040 and report staking income on Schedule 1 (Form 1040), Line 8z.
- Broker reporting: Starting in 2025, Form 1099-DA will require brokers to report digital asset disposals, potentially capturing staking events facilitated by exchanges.
Industry reaction has been mixed. Some providers welcome clear tax rules, while others note the divergent timing between tax liability and securities compliance—creating a dual-track system where the IRS taxes tokens even as the SEC debates their regulatory classification.
Implications for Investors and Network Participants
The dual processes—SEC consideration of staking guidance and IRS rules on taxation—carry several implications for stakeholders:
- Operational complexity for service providers
Staking platforms must navigate potential SEC registration requirements while ensuring robust tax reporting for customers. Companies may need to implement additional compliance controls, such as KYC/AML procedures tailored to proof-of-stake services. - Investor decision-making
Uncertainty around staking’s legal status could dampen institutional participation, as asset managers hesitate to launch products that may require retroactive compliance or face enforcement actions. - Competitive landscape
Clear rules could benefit US-based infrastructure providers, but prolonged ambiguity risks pushing staking operations offshore to permissive jurisdictions like Switzerland or Singapore. - Network security and adoption
Staking underpins security in proof-of-stake networks. Regulatory barriers that reduce staking participation can inadvertently weaken network resilience and slow ecosystem growth. - Tax planning considerations
Investors should account for tax liabilities on staking rewards, potentially adjusting strategies—for instance, timing of reward withdrawals—to optimize annual tax outcomes.
Recent Trends and Outlook
Beyond the immediate regulatory actions, industry observers note several trends shaping the staking landscape:
- Exchange-led staking resurgence: Kraken, after resolving past SEC disputes, reintroduced staking for US customers earlier this year, now supporting tokens like SOL, ETH, DOT, and ADA.
- Interoperability solutions: Projects like SkyLink leverage LayerZero to enable cross-chain staking yield distribution, signaling innovations that could blur jurisdictional boundaries and complicate regulatory oversight.
- Institutional product filings: Beyond spot ETFs, issuers are exploring staking-enabled funds that automatically restake rewards—heightening the need for clear guidance on the treatment of such features within regulated products.
- Global regulatory divergence: The EU’s Markets in Crypto-Assets (MiCA) framework and Singapore’s Payment Services Act provide contrasting approaches to staking oversight, intensifying competition to attract Web3 infrastructure.
Looking ahead, the intersection of SEC rule-making, IRS guidance, and evolving product innovation suggests a watershed period for staking. Clear, balanced regulations could unlock capital inflows and network security improvements, whereas prolonged uncertainty risks a fragmentation of the global staking ecosystem.
Conclusion
The US staking ecosystem stands at a critical juncture. As the SEC’s Crypto Task Force weighs formal guidance on proof-of-stake activities, and as the IRS enforces clear taxation rules on staking rewards, industry participants face a complex regulatory tapestry. Clarity from the SEC could catalyze spot Solana ETF approvals, bolster network security, and reaffirm America’s competitiveness in Web3. Conversely, delays and jurisdictional shifts may erode the country’s leadership in blockchain innovation. For investors, infrastructure providers, and network validators alike, close monitoring of SEC rule-making, public comment processes, and IRS implementations will be essential in navigating the evolving staking landscape.