The U.S. Securities and Exchange Commission’s Division of Corporation Finance published FAQ guidance on September 25, 2026 stating that staking crypto assets on a proof-of-stake network — including Ethereum — does not, on its own, involve the offer or sale of securities. The clarification landed as the amount of ETH waiting to be staked climbed past 1.68 million tokens.
What did the SEC staff actually say?
According to reporting from CoinGape and BeInCrypto, the SEC’s Division of Corporation Finance issued a set of frequently asked questions on crypto assets on September 25, 2026. The staff position is that protocol staking — locking tokens to help validate transactions on a proof-of-stake blockchain — does not satisfy the “efforts of others” element of the Howey test, because validators are performing administrative or ministerial functions rather than relying on the entrepreneurial or managerial efforts of a third party.
The guidance also addressed liquid staking. Per the same reporting, staff indicated that liquid staking receipt tokens such as stETH, cbETH and rETH may be treated as receipts for an underlying digital commodity rather than as securities, provided the issuer does not lend, pledge or rehypothecate the deposited assets.
How much ETH is waiting to be staked?
The guidance arrived during a period of heavy validator activity. 24/7 Wall St reported that roughly 1.68 million ETH — worth about $4.5 billion at the time — was sitting in the entry queue waiting to be staked, against roughly 150,000 ETH in the exit queue.
- Entry queue: about 1.68 million ETH (~$4.5 billion), per 24/7 Wall St.
- Exit queue: roughly 150,000 ETH.
- Reported entry-to-exit ratio: about 11 to 1.
That lopsided ratio means far more validators were trying to enter than leave, a dynamic the outlet attributed to growing institutional interest in staking yield. Ethereum’s queue is rate-limited by protocol design, so large inflows can take days or weeks to clear.
Staking on Ethereum involves depositing ETH to run or back a validator that proposes and attests to blocks under the network’s proof-of-stake consensus, earning protocol rewards in return. Because validators join and exit through a throttled queue, a backlog on the entry side signals demand to lock up ETH rather than an immediate change in circulating supply. The size of the queue is closely watched as a proxy for conviction among larger holders.
Why does the “staff guidance” distinction matter?
The documents are staff statements, not formal Commission rules. As CoinGape noted, the FAQs do not create new legal obligations, and the SEC itself has neither approved nor rejected the staff’s answers. That means the interpretation can be revised or withdrawn by staff without a Commission vote, and it does not carry the force of law that legislation or a formal rulemaking would. Market participants have treated the guidance as a signal of regulatory direction rather than a binding safe harbor.
How does this connect to stalled crypto legislation?
The staff guidance followed a legislative setback. Reporting around the release noted that the Senate did not advance the market-structure bill known as the Clarity Act in mid-September 2026, leaving open questions about how staking and other crypto activities should be classified. With Congress stalled, the SEC staff’s FAQs became one of the clearest federal statements available on how regulators are approaching staking — even if that clarity is informal and subject to change.
What could this mean for Ethereum ETFs and staking products?
The guidance is relevant to the continuing effort to add staking to U.S. spot Ethereum exchange-traded funds, where issuers have sought approval to pass staking rewards to shareholders. A clearer staff view that protocol staking is not inherently a securities activity removes one source of uncertainty for those products, though it does not by itself approve any specific fund feature; separate exchange rule filings still govern whether a given ETF can stake its holdings.
Background: how Ethereum staking and the entry queue work
Ethereum moved to proof-of-stake in 2022, replacing mining with validators who lock up ETH to propose and attest to blocks. Validators join and leave through protocol-enforced queues that cap how much stake can enter or exit each day, which is why a backlog builds when demand surges. 24/7 Wall St. reported that the network was admitting roughly 57,600 ETH per day at the time — translating into about a month’s wait for new entrants — and that around 35.6% of all ETH was already staked.
On the legal test, CoinGape reported the staff’s reasoning that once a proof-of-stake network is functional, routine work such as security maintenance, software updates and development funding can continue “without making essential managerial efforts,” so the staking itself does not satisfy the Howey test’s “efforts of others” prong.
Why it matters
Uncertainty over whether staking is a securities offering has shaped how U.S. platforms and fund issuers handle ETH for years. A staff view that protocol staking falls outside securities law removes one recurring source of legal risk for validators, exchanges and asset managers — though, as CoinGape stressed, the FAQs impose no new legal duties and the Commission has neither approved nor rejected them. The significance is directional: it signals how regulators currently read the law, not a binding rule that a court or a future Commission must follow.
What to watch next
Two threads are worth following. First, whether the staff’s informal FAQs are eventually converted into a formal Commission rulemaking or overtaken by legislation; the market-structure Clarity Act did not advance in the Senate in mid-September 2026, leaving the guidance as the clearest federal signal for now. Second, whether exchanges and issuers lean on the guidance to advance pending requests to add staking to U.S. spot Ethereum ETFs, which are governed by separate exchange rule filings rather than by the FAQs themselves — so any change there would arrive through those filings, not the staff statements.
This article is informational and is not investment advice. Nothing here should be read as a prediction of ETH’s price or a recommendation to stake, buy or sell any asset.
Sources
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Disclaimer: The content on this page is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.
Sarah Williams is STnews's Blockchain Editor, leading coverage of blockchain technology, DeFi investigations, exchange analysis and crypto regulation. Her reporting adheres to STnews's editorial standards — primary-sourced, cited, and non-advisory.
Conflicts of interest
I hold no positions in any cryptocurrency mentioned in my coverage. All investment-related content is reviewed by senior editors before publication. I am not compensated by any project I cover.
