CTF Written Submission

Recommendations to the Crypto Task Force, Part II: Addressing Security Status, Scoping Out and Public Offerings

Aug. 15, 2025
  • The SEC’s Division of Corporation Finance concluded that proof-of-work (POW) mining activities do not constitute the offer and sale of securities under federal securities laws.
  • The proof-of-stake (POS) validation process should not be considered an investment contract security under the Howey test, as rewards are compensation for technical validation services, not profits based on the efforts of others.
  • The issuance of liquid staking tokens (LSTs) should not be considered the offer or sale of a new security, as they are temporary stand-ins for the original staked crypto assets.

Last Reviewed or Updated: Aug. 15, 2025