Author: THEJASWINI MA; Translated by: Saoirse, Foresight News
In 1688, captains would gather at Edward Lloyd’s Coffee House in London to look for people willing to insure their voyages. Wealthy merchants would sign their names below the details of their ships to become “underwriters,” pledging their personal wealth to guarantee these risky voyages.
The more reputable the underwriter, the safer the voyage for the captain. The safer the system, the more business it attracts. The deal is simple: provide the capital, reduce the risk for everyone, and then take a share of the profits.
After studying the new regulations of the US SEC, you will find that cryptocurrency is actually a digitization of the model invented by those underwriters in the coffee shop: people get returns by putting their own assets at risk, thereby making the entire system safer and more trustworthy.
Pledge is now back on the agenda.
On May 29, 2025, a sea change occurred. On this day, the US government made it clear that pledging would not put people in legal trouble. First, it is necessary to recall why this is so important at this moment.
In the staking mechanism, you lock up your tokens to increase the security of the network and gain stable returns.
Validators use their staked tokens to verify transactions, package new blocks, and ensure the smooth operation of the blockchain. In return, the network pays them newly minted tokens and transaction fees.
Without stakers, proof-of-stake networks like Ethereum would collapse.
Of course, you can stake your tokens, but no one knows whether the US SEC will suddenly come to your door one day and claim that you are conducting an unregistered securities offering. This regulatory uncertainty has left many institutions sitting on the sidelines, watching enviously as retail stakers earn an annualized return of 3%-8%.
A massive staking wave is coming
On July 3, the Rex-Osprey Solana + Staking ETF was officially launched, becoming the first fund in the United States to provide direct cryptocurrency exposure with staking rewards. The fund holds SOL tokens through a Cayman Islands subsidiary and stakes at least half of its holdings.
“This is the first U.S.-backed cryptocurrency ETF,” REXShares announced.
And they are not the only ones launching such products.
- Robinhood has just launched a cryptocurrency staking service for US users, initially supporting Ethereum and Solana;
- Kraken has added a new Bitcoin staking feature through the Babylon protocol, allowing users to earn income through staking while holding Bitcoin on the native chain;
- VeChain launches $15 million “StarGate” staking program;
- Even Bit Digital is selling off its entire Bitcoin mining business to focus on Ethereum staking.
(Note: Bit Digital is a Nasdaq-listed company with the stock code: BTBT. Its headquarters is located in New York, USA, and its Asian headquarters is located in Hong Kong, China. Its predecessor was the Chinese P2P lending platform "Dianniu Finance". In 2020, it transformed into a cryptocurrency mining company through business restructuring and changed its name to Bit Digital, becoming one of the world's first publicly listed Bitcoin mining companies.)
Now, what exactly has changed?
Double regulation domino effect
The first is the pledge guidance issued by the SEC in May 2025.
The guidelines state that if you stake your cryptocurrency to help run a blockchain, this is completely compliant and is not considered a high-risk investment or security.
This includes staking alone, delegating tokens to others for staking, and staking through trusted exchanges, as long as your staking behavior directly helps the network run. This excludes most staking behaviors from the scope of "investment contracts" defined by the "Howey Test." This means that you no longer need to worry about violating investment regulations because of staking to obtain income.
(Note: The Howey test is an important basis for the SEC to determine whether cryptocurrencies are "securities.")
The only thing you need to be wary of is the promise of guaranteed returns, especially when combining staking with lending, or launching so-called "DeFi portfolio products" and promising fixed returns, conducting fancy operations such as liquidity mining, etc.
The second is the CLARITY Act.
This is a proposed bill in the U.S. Congress that aims to clarify the regulatory bodies of different digital assets. The bill specifically aims to protect node operators, staking participants and self-custodial wallet users from being treated as Wall Street brokers.
The bill introduces a new category of digital commodities, “investment contract assets”, and establishes specific criteria for defining digital assets as securities (regulated by the SEC) or commodities (regulated by the CFTC). The bill also establishes a “maturity” assessment mechanism for blockchain projects or tokens, allowing them to be transferred from SEC regulation to CFTC regulation, and sets a time limit for SEC reviews to eliminate regulatory delays.
So, what does this mean for you?
Thanks to the SEC's regulatory guidance, you can now more confidently carry out cryptocurrency staking in the United States. If the CLARITY Act is passed, everyone who intends to participate in staking or cryptocurrency investment will have a simpler and safer operating environment.
The income from pledges is still taxed as ordinary income when you obtain "control" over it; if the proceeds are subsequently sold at a profit, capital gains tax will apply. All pledge income, regardless of the amount, must be reported to the IRS.
Who will be the focus? Ethereum
However, its price remains around $2,500.
Despite the mediocre price performance, Ethereum's staking data is full of highlights. The total amount of ETH currently staked has exceeded 35 million, a record high, accounting for nearly 30% of the total circulation. Although the construction of related infrastructure has lasted for several months, its strategic value is experiencing an explosive rise as regulation is implemented.
https://dune.com/queries/1941407/3202651
What big moves are the boards of directors of major companies planning?
BitMine Immersion Technologies has just completed a $250 million financing, which is specifically used to purchase and pledge ETH. Fundstrat founder Tom Lee serves as chairman. The company believes that the return from staking plus price appreciation will surpass traditional treasury assets.
SharpLink Gaming has taken this strategy to the extreme: its ETH reserve has expanded to 198,167, and it has achieved 100% full pledge. In just one week in June, its pledge income reached 102 ETH, which is a model of "locking up and making money".
At the same time, Ethereum ETF issuers are queuing up to apply for pledge qualifications. Bloomberg analysts predict that the probability of pledge ETFs obtaining regulatory approval in the coming months is as high as 95%. The head of BlackRock's digital assets bluntly stated that the pledge mechanism will become a "disruptive turning point" for Ethereum ETFs, and this judgment is quite convincing.
If approved, this type of staking ETF is expected to reverse the outflow of funds from the Ethereum Fund since its inception. When investors can obtain both price exposure and staking income at the same time, who would be satisfied with a single price fluctuation return?
https://x.com/VitalikButerin/status/1936036966904308203
When Cryptocurrencies Speak the Language of Wall Street
For years, traditional finance has struggled to understand the value proposition of cryptocurrencies. Digital gold? Maybe. Programmable money? Sounds too complicated. Decentralized applications? What’s wrong with centralized applications?
But Wall Street definitely understands the word "yield". It is true that bond yields have rebounded from the near-zero lows of 2020, with the 1-year US Treasury yield back to around 4%. But imagine a regulated crypto fund that can generate 3-5% staking income each year and provide the potential for appreciation of the underlying assets. This is simply full of fatal attraction.
The core lies in the breakthrough of legality. When pension funds can gain exposure to Ethereum through a compliant ETF, and the fund generates income by ensuring network security, this is undoubtedly a milestone in the industry.
The network effect has shown a clear pattern: more institutions participate in staking → network security is improved → attract more users and developers → the scale of applications increases transaction fees → staking income further increases. This is a virtuous cycle that benefits all participants.
You don’t need to understand blockchain technology or believe in the concept of decentralization, as long as you understand the simple logic of “holding assets can make a profit”; you don’t need to agree with the Austrian School of Economics or question the authority of the central bank, as long as you understand the value of “productive capital assets”. In essence, the network needs security, and the guardians should be reasonably compensated.
