What it is
In proof-of-stake blockchain networks, staking involves locking up cryptocurrency to support network operations and validate transactions, earning rewards in return. Staking-as-a-service providers manage the technical complexities of running validator nodes, such as uptime, security, and software updates, allowing individual investors to participate in staking without needing specialized hardware or expertise.
The regulatory status of staking-as-a-service offerings is a contentious issue, particularly regarding whether they constitute an "investment contract" and thus a security under the Howey Test. The SEC has taken enforcement actions against some providers, arguing that the pooled nature of funds and the expectation of profits from the efforts of others classify these services as unregistered securities.
Why it matters
Your participation in staking through a service could be deemed an investment in a security, impacting your tax obligations and regulatory protections.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice