Due to a major policy change, the US Securities and Exchange Commission has announced that certain handpicked staking activities on the P-O-S blockchain won’t be deemed securities transactions.
This call marks a departure from existing enforcement actions and provides much-needed regulatory clarity for the crypto sector.
The Corporation Finance segment of the SEC ruled that staking rewards given to validators and node operators would be considered compensation against services offered, rather than the forsaken profits of others.
This segregation applies to both custodial and non-custodial staking services simultaneously. However, there is a catch. The validators must act on behalf of users, without determining the staking amount themselves.
Experts believe that Ethereum will benefit from the SEC’s ruling. In 2022, Ethereum transitioned to a Proof-of-Stake (PoS) consensus mechanism. Therefore, asset managers can now create avenues for incorporating staking rewards into ETF-plugged trade funds.
As a result, investors will now receive additional income streams.
Many firms, including ARK and Fidelity, have filed proposals to incorporate staking under their ETH ETFs.
The new stance introduced by the SEC will increase the chances of the proposal gaining traction. This would lead to innovative financial products that combine the benefits of ETFs with those of staking rewards.
More Follow-Ups
Despite the positive regulatory update, ETH experienced a short-term price decline. At the time of writing, it is trading at $2,611.03.
However, the market hopes that bullish trends will follow after the latest SEC declarations. Not only ETH. The other PoS networks, including Solana, will also experience growth!
