INSUBCONTINENT EXCLUSIVE:
Opinion by: Margaret Rosenfeld, chief legal officer of EverstakeAt the dawn of the internet in the late 1990s, technology outpaced
willing to engage directly with how the technology worked
sign that the agency is beginning to recognize the difference between participating in a network and investing in a security.A turning point
that some forms of staking may fall outside the definition of securities transactions
If staking is correctly treated as infrastructure participation rather than speculative investment, it could realign the US with other
jurisdictions that have taken a more nuanced approach.The core issue is the application of the legal Howey test
mechanisms operate without custody, pooling or performance promises
When tokenholders delegate to validators, they help secure the network, not enter into a contract for profit.This is not a theoretical
Treating protocol staking as a securities transaction imposes extensive compliance burdens: registration, disclosures, custody requirements
and anti-fraud obligations designed for traditional financial instruments.If those rules are applied to open-source blockchain
infrastructure, the result would be chilling validator activity and pushing innovation offshore
However, a differentiated framework that separates non-custodial staking from custodial or pooled models preserves investor protection and
protocol decentralization.Policy progress starts with protocol-level understandingWhat enabled this more sophisticated regulatory
understanding was not just legal theory but technical explanation
Effective dialogue between regulators and the industry required more than submitting legal briefs
It required walking through validator operations, staking mechanics and protocol-level design with engineers, developers and infrastructure
building the systems, policy becomes rooted in real-world understanding
especially for platforms that blend staking with liquidity guarantees or profit assurances
It does indicate that the agency is willing to look at technical realities.The market effect of that shift is significant
It gives US-based developers and validators a stronger legal footing and sends a signal to institutional participants that there is room for
compliant infrastructure development.Commissioner Hester Peirce has long urged the SEC to evaluate blockchain services based on their actual
design rather than superficial resemblance to legacy finance
This shift would allow developers to build systems that support network security without fear of triggering securities laws if appropriately
implemented.Skeptics argue that any token-based reward mechanism is, by nature, a financial return
This flattens the diversity of blockchain protocols
Delegators retain control of their assets, and validators perform a technical service rather than a financial one
Applying one-size-fits-all securities laws to such systems risks distorting incentives, over-regulating developers and leaving the US behind
It means interpreting existing frameworks with a full understanding of the underlying technology
It does, however, signal that technology-specific engagement is happening and that the SEC may be prepared to continue differentiating
between infrastructure and investment
but only if regulators take the time to understand how blockchain systems actually function
education.Opinion by: Margaret Rosenfeld, chief legal officer of Everstake.This article is for general information purposes and is not
intended to be and should not be taken as legal or investment advice
