Everstake Defends Non-Custodial Staking as SEC Seeks Industry Feedback

Everstake, one of the world’s largest non-custodial staking providers, met with the U.S. Securities and Exchange Commission’s Crypto Task Force to advocate for clearer regulatory definitions around blockchain staking, especially in non-custodial models.

The meeting comes as over $193 billion in digital assets are currently staked across major proof-of-stake (PoS) networks, yet regulatory uncertainty in the U.S. continues to cloud the industry. Although recent policy shifts under President Donald Trump’s pro-crypto administration have eased enforcement, prior SEC actions targeted companies like Kraken, Coinbase, and Consensys for offering staking services.

Staking Is a Technical Function, Not a Security, Says Everstake

During the discussion, Everstake emphasized that non-custodial staking should not be treated as a securities transaction. In its model, users maintain full control of their assets, delegating only validation rights without transferring ownership to any third party.

“Staking is not a financial instrument or security transaction, but rather a technical process, a base-layer protocol mechanism—akin to an oracle in a database,” said Everstake founder Sergii Vasylchuk.

In other words, staking in this form is a decentralized, protocol-driven function, not a managed investment.

Formal Request for Clarity Sent to SEC

In an April 8, 2025 letter to the SEC’s Crypto Task Force—submitted in response to Commissioner Hester Peirce’s call for industry input—Everstake outlined its case for regulatory clarity around all staking models, especially non-custodial and liquid staking.

The firm argued that non-custodial staking fails the Howey Test, the benchmark used to determine whether an activity constitutes a securities offering. Everstake highlighted key points:

• No investment of money in a common enterprise

• No reasonable expectation of profits based on managerial efforts

• No asset handover or pooled funds

Instead, staking rewards are distributed directly by the blockchain and fluctuate based on network incentives and market value.

Proposed Exemption Criteria for Non-Custodial Staking

Everstake recommended that non-custodial staking should be exempt from securities classification if it meets the following criteria:

• Users retain full control over their tokens

• No pooling of user assets

• Permissionless unstaking options

• Services provided are purely technical

The company likened non-custodial staking to proof-of-work mining, which has been previously deemed outside the scope of securities regulation.

Legal Perspective and Industry Push for Guidance

Everstake’s Chief Legal Officer, Margaret Rosenfeld, reinforced the company’s stance:

“With non-custodial staking, there’s no handover of assets, no investment contract, and no third-party risk. Treating it as a securities offering undermines the decentralized model and risks chilling innovation in the blockchain sector.”

While the SEC has not offered a definitive stance, Rosenfeld said the agency remains open to dialogue.

“The Task Force is actively engaging with a range of stakeholders—including those involved with non-custodial staking, ETFs, and broader blockchain infrastructure—to gather input.”

In a separate April 30 letter, nearly 30 crypto advocacy organizations led by the Crypto Council for Innovation (CCI) also called on the SEC to provide clear guidance on staking and digital asset services.