Staking in the Spotlight: Topic in Focus

In the context of a rapidly evolving global digital asset landscape, regulator attention has become increasingly focused on the practice of staking, in particular whether and how this activity should be regulated. We are seeing various regulators grappling with determining the scope of activities that should be subject to regulation, the types of firms that may be permitted to conduct staking services (and the nature of licences required) and the identity of the clients that may be targeted.

Below we consider and reflect on some recent actions being taken by various global regulators that are shaping the development of this area of regulation.

1. What is staking?

There is currently no industry agreed terminology to define staking and the label is used to describe a wide range of arrangements with materially different legal and operational characteristics.

However, in broad terms, staking is considered to be a process in which crypto asset holders volunteer to lock up their assets for a set period of time in order to assist in validating transactions on a network’s blockchain. Staking is intended to help confirm that only legitimate transactions are added to a blockchain. In return for locking up their crypto assets, holders earn staking rewards.

2. What are the regulators doing?

We have set out below examples of a number of recent proposals global regulators have introduced or are considering in relation to staking. While we can expect more supervisory scrutiny in this area, jurisdictions are at different stages in how they will address the regulatory requirements.

A. Developments relating to the types of entities able to provide staking services

European Union

The EU under MiCA does not regulate staking as a standalone activity, and there are no specific rules applicable to staking itself. Instead, staking is captured indirectly where it is offered as a service by an intermediary, most commonly alongside custody. In this case, staking is treated as ancillary to a regulated crypto-asset service and triggers the full suite of MiCA organisational, conduct and safeguarding requirements. The EU’s position is set out primarily in ESMA’s MiCA Q&As¹ (reflecting the European Commission’s interpretation), which adopt a narrow, technical definition of staking focused on the immobilisation of crypto-assets to support proof of stake or similar consensus mechanisms in exchange for validator rights and potential rewards.

Under this framework, proprietary staking by crypto-asset holders falls outside the regulatory perimeter. By contrast, staking provided as a service—particularly where it involves holding clients’ crypto-assets or private keys—is treated as part of custody and administration and is regulated accordingly.

¹See links: ESMA_QA_2607 and ESMA_QA_2067 and ESMA_QA_2608

ADGM

The Abu Dhabi Global Market (ADGM) adopts a broadly similar service- and custody-based approach to the EU, but with greater perimeter clarity. The Financial Services Regulatory Authority (FSRA) finalised its staking framework on 29 April 2026 through amendments to its rulebooks². The regime takes an activity-based approach, focusing on staking-as-a-service where it is intermediated by authorised custodians and asset managers, with obligations calibrated to the degree of control over client assets. Validators, infrastructure providers and self-staking participants generally fall outside scope, and the framework extends beyond proof of stake arrangements to functionally similar models.

Staking within scope is regulated under the existing ADGM virtual asset framework, including conduct of business and AML requirements, supplemented by staking-specific obligations (such as prior notification to the ADGM, enhanced client disclosures and extensive client reporting requirements). The FSRA adopts a narrow definition of staking and excludes other yield-generating activities (such as liquidity mining and yield farming) and liquid staking tokens, although future regimes are contemplated, as well as restricting the form of rewards that may be offered to clients.

²See link:  29 April – FSRA Rules (Staking) | Rulebook

Dubai International Financial Centre

Similar in approach to the EU, the DIFC’s Dubai Financial Services Authority (DFSA) regulates staking as a service on a narrow, activity based basis, where crypto tokens are used or lent for participation in proof of stake consensus mechanisms. There is no standalone definition of staking, and no bespoke staking regime, instead staking-as-a-service is regulated through existing permissions. Amendments to the DFSA rulebook, effective from May 2024³, provide that an authorised firm may offer or provide a staking service only in connection with proof of stake transactions, and subject to additional requirements. Staking services may also be offered only to professional clients or market counterparties. Due diligence must be carried out before selecting a validator.

³See link: Notice of Amendments to Legislation: May 2024 | DFSA

Hong Kong SAR

Hong Kong regulators are generally receptive to staking as a service but regulate it within the existing virtual asset licensing framework, applying a “same activity, same risk, same regulation” approach with a strong focus on investor protection. This approach is reflected in circulars issued by the Securities and Futures Commission (SFC)⁴ and the Hong Kong Monetary Authority (HKMA)⁵ in April and September 2025. Hong Kong does not regulate staking as a standalone activity; but instead regulates staking as a service where provided by licensed virtual asset trading platforms (VATPs) or HKMA authorised firms through custodial arrangements. Staking-as-a-service is defined broadly as arrangements involving the locking of client virtual assets for participation in proof of stake validation in return for rewards.

The Hong Kong regulators have adopted a relatively prescriptive approach, introducing bespoke rules and guidance tailored to the regulatory status and staking related activities of different categories of virtual asset participants. These include VATPs, HKMA authorised persons, SFC regulated virtual asset funds, and (in due course) licensed virtual asset custodians, resulting in a granular regulatory treatment of staking activities.

⁴See links: Circular on staking services provided by virtual asset trading platforms | Securities & Futures Commission of Hong Kong and HKMA Banking Regulatory Document Repository

⁵See link: HKMA Banking Regulatory Document Repository

Singapore

The Monetary Authority of Singapore (MAS) has adopted a more restrictive approach to staking, particularly where retail investors are concerned. In its July 2023⁶ response to its consultation on digital payment token (DPT) services, MAS confirmed that DPT service providers are prohibited from facilitating staking and lending for retail customers, citing risks of significant consumer harm from unregulated activities and platforms.

By contrast, staking and lending may be offered to institutional and accredited investors, subject to safeguards including clear risk disclosures and the client’s explicit consent. The MAS will continue to closely engage with the industry monitor developments in this evolving area.

⁶See link: Response to Public Consultation on Proposed Regulatory Measures for Digital Payment Token Services

B. Bringing staking within the regulatory framework

United Kingdom

Like the EU and Hong Kong, the UK does not regulate protocol level blockchain infrastructure and does not treat staking as a standalone financial product. Instead, it is expanding its regulatory perimeter to capture intermediated staking services while preserving protocol level staking as a legitimate network function. Under regulations due to come into force on 25 October 2027⁷, the UK introduces a new regulated activity of making arrangements, on behalf of another person, for qualifying crypto asset staking. Staking is defined narrowly as the use of a crypto asset in blockchain validation, distinguishing protocol-level staking from other yield generating activities sometimes marketed as “staking”.

The regime captures firms that intermediate clients’ access to protocol level staking (including staking as a service) but excludes proprietary staking and FCA authorisation is required, unless an exclusion applies. In a December 2025 consultation⁸, the FCA proposes a retail focused conduct regime for qualifying staking, including mandatory disclosures, express prior client consent, and application of relevant FCA Handbook requirements.

⁷See link: The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2025

⁸See link: CP25/40: Regulating Crypto asset Activities

C. Regulation via enforcement and interpretative guidance

United States

The US approach to regulating staking has developed primarily through regulatory enforcement actions⁹ and interpretative guidance issued by the Securities and Exchange Commission (SEC) , rather than through bespoke crypto asset legislation. The SEC assesses staking by reference to whether particular arrangements constitute the offer and sale of securities under federal law, applying the investment-contract analysis established in SEC v. W.J. Howey Co. In response to market uncertainty, the SEC established the Crypto Asset Task Force in January 2025¹⁰ to develop a more coherent regulatory approach.

In March 2026, the SEC issued a Commission-level interpretative release which was developed by the Crypto Asset Task Force, and clarified that certain protocol level staking activities specified in the release involving the staking of “covered crypto assets” on proof of stake networks and the performance of validation related functions that are administrative or ministerial in nature—do not involve the offer or sale of securities within the meaning of the Securities Act or the Exchange Act. Liquid staking and re-staking fall outside the scope of this guidance.

⁹See link: Kraken to Discontinue Unregistered Offer and Sale of Crypto Asset Staking-As-A-Service Program and Pay $30 Million to Settle SEC Charges

¹⁰See link: The Journey Begins

3. Further developments to come?

At aosphere Rulefinder Crypto Assets, we are continuing to monitor developments relating to staking, including new and evolving requirements and variations from jurisdiction to jurisdiction.