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Matthias Knab, Opalesque for New Managers:

On May 29, 2025, SEC Commissioner Caroline A. Crenshaw issued a critical response to the Division of Corporation Finance's recent statement asserting that protocol staking activities do not constitute investment contracts under federal securities laws.

Crenshaw contends that this position conflicts with established legal precedents and the SEC's prior enforcement actions. Key Points:

- Contradiction with Legal Precedents: Crenshaw argues that the staff's conclusion disregards the Howey test, the standard for determining what constitutes an investment contract. She references previous SEC enforcement actions against staking-as-a-service programs, such as those involving Coinbase and Kraken, where courts upheld the SEC's view that these programs involved investment contracts.

- Concerns Over Investor Protection: The Commissioner expresses concern that the staff's stance could undermine investor protections by allowing staking programs to operate without appropriate regulatory oversight. She emphasizes the need for consistent application of securities laws to maintain market integrity.

- Call for Regulatory Clarity: Crenshaw urges the SEC to provide clear guidance on the regulatory status of staking activities to prevent confusion and ensure that market participants understand their co......................

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