On May 29, 2025, the staff of the SEC’s Division of Corporation Finance released a statement regarding “Certain Protocol Staking Activities. ” For specific “staking” activities conducted on blockchain networks that employ proof-of-stake (“PoS”) as their consensus mechanism (“PoS Networks”), the SEC staff expressed the view that these activities do not constitute the offer and sale of securities under the SEC’s Howey test. These SEC staff views pertain solely to the following Protocol Staking activities and transactions (each referred to as a “Protocol Staking Activity”): - Staking Covered Crypto Assets on a PoS Network; - Activities carried out by third parties involved in the Protocol Staking process—including but not limited to third-party Node Operators, Validators, Custodians, Delegates, and Nominators (“Service Providers”)—including their roles related to earning and distributing rewards; and - Providing certain ancillary services that are administrative or ministerial in nature. Furthermore, the SEC staff’s views are confined exclusively to Protocol Staking Activities conducted within the scope of these types of Protocol Staking: - Self (or Solo) Staking, where a Node Operator stakes Covered Crypto Assets that it owns and controls using its own resources. A Node Operator may comprise one or more individuals acting jointly to operate a node and stake their Covered Crypto Assets. - Self-Custodial Staking Directly With a Third Party, which occurs when, under the protocol’s terms, a Node Operator is granted the validation rights of the owners of Covered Crypto Assets. Reward payments may be received either directly by the Covered Crypto Asset owners from the PoS Network or indirectly via the Node Operator. - Custodial Arrangements, involving a Custodian staking on behalf of owners of Covered Crypto Assets held in custody.

For instance, a crypto asset trading platform that holds deposited Covered Crypto Assets for its clients may stake those assets on their behalf on a PoS Network that allows delegation with the customers’ consent. The Custodian stakes the deposited Covered Crypto Assets either by operating its own node or by selecting a third-party Node Operator. In the latter scenario, the Custodian’s choice of Node Operator is the sole decision it makes in the staking process.