The Securities and Exchange Commission (SEC) is facing an increasing number of criticism from current and former officials about its evolving attitude towards crypto staking services.
On May 29, the SEC Corporation Finance division issued new guidance on crypto staking services, claiming that certain services may not constitute securities and could effectively exempt the certificate blockchain from registration requirements under the Securities Act.
However, the new interpretation of the SEC could diverge from several federal court decisions, according to former SEC internet executive John Reed Stark.
In a statement on X, Stark argued that the commission’s latest move is inconsistent with judicial findings in a well-known case against Binance and Coinbase of Crypto exchange.
“This is how the SEC dies – with obvious vision,” Stark wrote to the agency in a long response, calling the shift a “shady abandonment of the investor protection mission.”
Regarding Binance, the SEC had alleged that the exchange’s staking services constituted the provision of unregistered securities, but the case was ultimately dismissed in May 2025 for bias, preventing similar claims from filing similar claims. Similarly, in March 2024, a federal judge allowed the agency to proceed to suit against Coinbase, indicating that the SEC had “fully charged” that it was involved in the unregistered offer and the sale of securities. The lawsuit was dismissed in February 2025 as part of a broader change in the SEC’s approach to cryptographic regulation.
Incumbent Commissioner Caroline Crenshaw issued a statement on May 29th in response to the agency’s approach to crypto staking. The staff warned that the conclusions were not consistent with established case law or Howie tests.
“The staff analysis may reflect what the law wants, but that’s not equal to the court decisions on what they’re based on and the long-standing Howie precedent,” Crenshaw added.
“This is another example of the SEC’s ongoing ‘Fake It Till We Make It’ approach. Take action in anticipation of future changes, ignoring existing laws. ”
The committee recently implemented a series of deregulation measures around digital assets, including closing the investigation, withdrawing the lawsuit, and launching a roundtable to discuss regulations with industry participants.
“This encrypted penetration blitz,” Stark wrote.
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The SEC has constituted recent actions as part of an effort to provide regulatory clarity, but critics argue that the outcome is even more confusing.
In a June 2nd statement, Crenshaw questioned the consistency of the committee’s approach, noting when agents appear to treat certain digital assets, such as ether (ETH) and Solana (SOL) tokens, as securities.
“These crypto assets are probably not securities when it comes to registration requirements, but are they useful when registrants see the opportunity to sell new products?” Crenshaw said.
At the Bitcoin 2025 conference in Las Vegas, Nevada, Commissioner Hester Perth opposed criticism of the agency’s new view on crypto, noting that the classification of securities transactions depends more on the nature of the transaction than the assets themselves.
“Today, most crypto assets are probably not securities in themselves. That doesn’t mean that you can’t sell tokens that are not security for transactions, which are securities transactions. So you need to provide some guidance.”
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