SEC staff says staked ETH receipt tokens are not securities

SEC staff says tokens issued for staking ether are not securities when they function only as receipts. The Division of Corporation Finance published the guidance on Friday. The token cannot change the rights attached to the staked ether. The token cannot add extra rewards. The provider cannot lend, pledge, or reuse the deposited coins. The token cannot set or fix the rewards. A March 17 interpretation from the SEC and the Commodity Futures Trading Commission named 16 digital commodities. Ether was one of those commodities and was trading near $2,685. Staff statements in May and August 2025 said protocol staking and liquid staking do not involve securities offerings. The FAQs say staking receipt tokens are digital tools when the underlying coin is a digital commodity. The Howey test asks whether buyers expect profits from other people's work. In February 2023, Kraken paid $30 million and shut down its U.S. staking service to settle SEC charges. The SEC said Kraken advertised yearly returns as high as 21%. Gary Gensler warned that crypto intermediaries offering investment contracts for investors' tokens needed to provide disclosures and safeguards required by securities laws. Four months later, the SEC sued Coinbase and called its staking program an unregistered securities offering. The SEC dropped that case in February 2025. Commissioner Caroline Crenshaw said the August 2025 liquid staking statement relied on assumptions that may not match real programs. The FAQs also address token buybacks. A buyback announcement on an operating network does not count as a promise that could make the token a security. A buyback pitch on an unfinished network could still count if it presents the buyback as a way to earn returns. The FAQs say they have no legal force. The Clarity Act failed in the Senate this month. The bill would split crypto oversight between the SEC and the CFTC. Analysts said regulators had already delivered most of the bill's promises. Guidance can be withdrawn by a future administration.