TheProof of Stake Alliance (POSA) has disclosed an updated set of guidelines aimed at addressing regulatory concerns and fostering responsible growth within the $250 billion crypto-staking sector. This comes at a crucial time, as major players in the industry seek clarity from regulators, including the US Securities and Exchange Commission (SEC). 
The updated guidelines come amid ongoing significant cryptocurrency adoption across the globe and overall positive sentiment. However, the revised POSA principles, supported by 18 prominent firms and protocols such as Coinbase, Ava Labs, and Lido, underscore the commitment to transparency and responsibility within the evolving crypto landscape.
An alliance of 18 firms including
Related Article: <a href="https://news.todayq.com/coinbase-faces-legal-challenge-in-maryland-over-its-staking-services/" rel="noopener noreferrer nofollow">Coinbase faces legal challenge in Maryland over its staking services</a> Key guidelines for revised POSA 1. Clear communication: 
Providers are urged to transparently communicate how users’ assets will be staked and outline associated risks. Clarity in communication is crucial to empower users with the information they need. 2. User control: 
Users should retain control over their staked assets. Providers are encouraged to empower users by explaining the staking process and ensuring users have the ability to manage their assets. 3. No guarantees on rewards: 
Staking providers should refrain from offering guarantees on <a href="https://news.todayq.com/irs-releases-new-guidelines-on-taxing-cryptocurrency-staking-rewards/" rel="noopener noreferrer nofollow">rewards distributed through staking</a>. The emphasis is on presenting a clear fee schedule and avoiding any competitive advantage beyond what is earned through staking. POSA revealed guidelines, 18 countries supporting 
Eighteen industry giants, including Alluvial, Coinbase, and Lido Protocol, have already pledged support for these guidelines, signaling a united front in promoting responsible practices.
The release of these guidelines coincides with ongoing efforts to regulate staking technology in the US. The SEC’s recent action against Kraken, a major US-based crypto exchange, highlights the regulatory scrutiny facing the industry. The SEC has argued that staked assets should be treated as securities, a claim challenged by the Proof of Stake Alliance.
Alison Mangiero, Executive Director of POSA, asserts that “True staking services are technical services, not securities.” The alliance contends that distinguishing between authentic staking services and those merely using the term is crucial for regulatory clarity. Importance of staking in Crypto 
Staking is fundamental to securing decentralized blockchains. Users lock up assets in validators, ensuring the integrity of transactions. Rewards, in the form of newly minted crypto, incentivize users to participate. However, some protocols misuse the term ‘staking,’ offering services that do not contribute to blockchain security.
While US regulators are yet to weigh in on the distinction between true and in-name-only <a href="https://news.todayq.com/singapore-bans-crypto-lending-and-staking-for-retail-investors/" rel="noopener noreferrer nofollow">staking services</a>, the POSA guidelines pave the way for providers to operate under regular commercial agreements. In the UK, there are signs of a similar understanding, emphasizing the need to differentiate staking activities for regulatory clarity.
As the crypto industry navigates regulatory challenges, the success of staking and proof-of-stake blockchains remains crucial for the broader crypto ecosystem. POSA’s guidelines aim to create a framework that balances innovation with responsible practices, fostering an environment conducive to sustainable growth.
© Todayq News

Report: POSA’s updated guidelines for $250 billion Crypto staking industry

Todayq News

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