May 14, 2020, New York, NY — Today, the Proof of Stake Alliance (POSA), a community-driven advocacy organization for Proof of Stake (PoS) technology, announced important steps aimed at improving the regulatory landscape that surrounds the Staking as a Service (STaaS) market.
Digital asset innovators are increasingly embracing Proof of Stake as the consensus protocol of choice for their native networks. The momentum in adoption of Proof of Stake, an energy-efficient and environmentally-conscious alternative to Bitcoin’s Proof of Work consensus protocol, underscores the importance of creating an open dialogue with regulators to help promote the growth of the STaaS market.
At a meeting in February, POSA engaged with the staff of the U.S. Securities and Exchange Commission on these topics. The purpose of this meeting was to educate the SEC staff about PoS technology and support a productive dialog with the SEC regarding the regulatory framework for STaaS offerings.
POSA submitted a white paper containing a legal analysis from the international law firm of Paul Hastings LLP, as well as a comprehensive overview of Proof of Stake and the STaaS market, and continues to engage in an ongoing dialogue with the SEC concerning the legal analysis.
“We are grateful for the time and the opportunity to converse with the SEC staff and their willingness to continue the dialogue with us. Through our initial engagement we were able to share useful insights into the functioning of Proof of Stake networks and the STaaS market that will serve as a foundation for further collaboration going forward.” —Matt Perona, Chief Operating Officer of Polychain Capital (POSA Member)
“Staking continues to gain momentum as a core security mechanism for new blockchain networks. It’s critical that the industry has an open dialogue with regulators, and that staking service providers abide by certain standards. By acting together, industry players can help ensure that Proof of Stake networks continue to flourish.” —Bryce Ferguson, Product Manager of Coinbase Custody (POSA Member)
POSA also previewed a set of industry-driven principles, developed by a group of its members, and was encouraged by the reception from the SEC staff concerning an industry effort to develop such solutions. The goal of these principles is to address potential regulatory concerns in order to encourage the continued growth of responsible staking in the United States. In summary, POSA is advocating that STaaS providers adopt the following industry-driven principles as they commercialize their services:
“As blockchain and Proof of Stake protocols transform the digital economy, it is becoming increasingly important that professional infrastructure providers demonstrate a more proactive commitment to upholding their responsibilities within the ecosystem. At Bison Trails, we support POSA’s initiative to engage regulators and establish responsible standards for the industry at large. We believe these efforts will serve to strengthen trust in the Proof of Stake ecosystem and help foster greater innovation.” —Joe Lallouz, CEO of Bison Trails (POSA Member)
POSA represents innovators, academics, service providers, and industry professionals and addresses key areas of regulatory uncertainty, provides a platform for the staking industry in the United States and drives engagement with policymakers. POSA is committed to educating and advancing policy discussions on behalf of the industry regarding tax and regulatory issues. For more information, visit https://www.proofofstakealliance.org/
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