SEC’s Shocking Revelation: Proof-of-Stake is NOT a Security! 🚀

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  • In a twist that could only be rivaled by a soap opera, the SEC has cleared a key legal obstacle for U.S. spot ETH ETF staking. 🎭
  • Meanwhile, ETF investors are feeling the burn, with losses soaring above 20% as ETH struggles to reclaim the elusive $3K. Ouch! 💸

In a move that has left many scratching their heads and wondering if they accidentally wandered into a parallel universe, the U.S. Securities and Exchange Commission (SEC), Division of Corporation Finance, has clarified that some staking activities are not security transactions. Yes, you heard that right! 🎉

Commissioner Hester Pierce, in a moment of rare lucidity, acknowledged this as a ‘welcome clarity’ for firms offering staking services. Because who doesn’t love a bit of clarity in the murky waters of finance?

“Today’s statement provides welcome clarity for stakers and ‘staking-as-a-service’ providers in the United States. The Division’s statement is applicable to persons who self-stake certain covered crypto assets on a proof-of-stake or delegated proof-of-stake network.”

Is ETH ETF staking approval likely? 🤔

This means that PoS systems like Ethereum [ETH], Solana [SOL], Cardano, and others are officially non-securities. Who knew? 🎊

According to Rebecca Rettig, Jito Labs’ legal officer, the guidance also applies to self and custodial (delegated) staking, including liquid staking. So, it’s a party for everyone! 🎈

“This bodes very well for other types of non-custodial staking activity, including liquid staking.”

In a plot twist that would make even the most seasoned soap opera writer proud, compared to the Biden-era regime, this was a massive shift. The Biden-era SEC fined Kraken exchange $30M, claiming that its staking service constituted unregistered security offerings. Talk about a dramatic turn of events! 🎭

Now, under the new Trump-era SEC, offering such service doesn’t need registration with the agency. It’s like a free-for-all, folks! 🎉

Will the agency greenlight the much-sought U.S. spot ETH ETF staking? ETF Store’s Nate Geraci noted that the only remaining hurdle was the IRS tax clarification. Because, of course, the IRS always has to be involved, doesn’t it? 🙄

“Another hurdle cleared for staking in spot ETH ETFs. Now need clarity from IRS on how staking revenue is handled in grantor trust (which is the structure used for spot ETH ETFs).”

In Q2, ETH staking saw renewed interest, growing from 33M ETH to over 34M ETH, with an average annualized return of 3%. Not too shabby, right? 💰

If approved, ETF buyers could enjoy these staking rewards without worrying about the complicated ways of staking individual ETH or the risks involved. It’s like having your cake and eating it too! 🎂

So, staking rewards could improve demand for products apart from relying on price appreciation alone. In fact, most ETH ETF holders were underwater, according to Glassnode. Who knew being underwater could be so fashionable? 🌊

“The average investor in the BlackRock and Fidelity Ethereum ETFs are now substantially underwater on their position, holding an unrealized loss of approximately -21% on average.”

That said, the positive news didn’t stir the ETH price. In fact, the altcoin’s spot market demand declined further, as shown by the downward movement on the spot CVD (Cumulative Volume Delta). It’s like watching a balloon slowly deflate. 🎈

But, the Open Interest (OI) remained elevated, suggesting high speculative interest and market leverage. Because who doesn’t love a bit of speculation? 🤷‍♂️

Unless ETH’s pot market demand improves, the high leverage could complicate the rally and heighten liquidation risks. Because, of course, we all love a good risk! 🎢

At press time, the altcoin was valued at $2.62K and has been consolidating between $2.3K and $2.7K in May. Just another day in the wild world of crypto! 🌍

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2025-05-30 17:19