On May 29, 2025, the SEC's Division of Corporation Finance issued a statement clarifying that certain protocol staking activities involving "Covered Crypto Assets" on proof-of-stake (PoS) networks do not constitute securities transactions under federal law. The Division concluded that staking—whether self-directed, through a third party, or via custodial services—is an administrative or ministerial activity, not an investment contract as defined by the Howey test. This view applies to activities where participants retain ownership of their assets and rewards are earned through protocol-defined processes, without reliance on the managerial efforts of others. However, the statement excludes forms like liquid staking and scenarios where third parties exercise discretion over staking decisions. Commissioner Hester Peirce supported the guidance, highlighting its potential to enhance network decentralization and reduce regulatory uncertainty.