Ship or Die at Accelerate 2025: Fireside Chat: Marinade (Alison Mangiero, Hadley Stern)

In a revealing fireside chat at Accelerate 2025, Alison Mangiero of the Proof of Stake Alliance sheds light on the complex world of staking regulation, offering hope for clearer guidelines and potential breakthroughs in Solana staking ETFs.

Summary

The Proof of Stake Alliance, founded in 2019, has been working tirelessly to establish regulatory clarity for staking in the cryptocurrency industry. Alison Mangiero, a key figure in the organization, discusses the progress made in engaging with regulatory bodies, particularly the SEC, and the challenges faced in educating policymakers about the intricacies of staking.

Despite some positive momentum, including recent constructive dialogue with the SEC and support from certain commissioners, Mangiero estimates that the industry is only about 25% of the way towards achieving full regulatory clarity for staking. The alliance is pushing for staking guidance similar to what has been issued for proof of work mining.

The conversation also touches on the global regulatory landscape for staking, with notable developments in the UK and Hong Kong. Mangiero expresses optimism about the potential for Solana staking ETFs in the US, citing recent filings and bipartisan support from senators.

Lastly, the discussion delves into the complexities of staking taxation, highlighting the ongoing debate about when staking rewards should be taxed and how liquid staking should be treated from a tax perspective.

Key Points:

Proof of Stake Alliance Background

The Proof of Stake Alliance was established in 2019 as a response to the emerging needs of Proof of Stake blockchains and staking service providers. As these new systems were being launched and commercialized, it became evident that regulatory clarity was essential for their successful market entry.

The alliance's primary focus has been on developing legal frameworks and industry best practices for staking. They have engaged with various governmental bodies, including Congress and the SEC, to advocate for sensible regulation in the staking industry. Their efforts have included publishing industry best practices in 2020, which were subsequently updated in 2023.

Regulatory Progress and Challenges

While some progress has been made in terms of regulatory clarity for staking, Mangiero estimates that the industry is only about 25% of the way there. This represents significant advancement from where they started, particularly in terms of engagement with regulatory agencies like the SEC.

In the past four months, there has been more constructive engagement with the SEC on staking issues than in the previous four years combined. This shift marks a departure from the previous administration's approach, which relied heavily on enforcement actions. However, challenges remain, including the need for specific staking guidance similar to what has been issued for proof of work mining.

Global Regulatory Landscape

The regulatory landscape for staking is evolving globally, with different regions making progress at varying rates. In the UK, recent developments include a draft statutory instrument and a discussion paper that addresses staking. Hong Kong has also made strides by approving staking services.

These international developments indicate a growing recognition of the importance of staking in the cryptocurrency ecosystem and the need for appropriate regulation. The Proof of Stake Alliance is actively engaging with regulators worldwide to help shape these emerging frameworks.

Staking ETFs and Future Outlook

The discussion touched on the potential for Solana staking ETFs in the US market. While Ethereum ETFs were approved last year, they were instructed to remove staking from their S1 filings. This has led to questions and pushback from industry players and even bipartisan groups of senators.

Mangiero expressed optimism about the future of Solana staking ETFs, citing recent filings and ongoing discussions with regulatory bodies. However, she emphasized that achieving this goal requires addressing concerns from both the SEC and Treasury Department, particularly regarding tax implications.

Taxation of Staking Rewards

The taxation of staking rewards remains a complex and contentious issue. The primary debate centers around when these rewards should be taxed - at the time of creation or at the time of sale. The Proof of Stake Alliance argues that staking rewards should be treated like other created property and taxed only at the time of sale.

Current IRS guidance suggests treating staking rewards as services income, a stance the alliance disagrees with. They are actively working to engage with the IRS and Congress to clarify these issues. Additionally, they have produced legal analyses on the tax implications of liquid staking, aiming to provide clarity on whether entering and exiting receipt tokens constitutes a taxable event.

Facts + Figures

• The Proof of Stake Alliance was founded in 2019
• The alliance published its first set of industry best practices in 2020, with an update in 2023
• Regulatory progress for staking is estimated at about 25% completion
• Marinade has approximately 2 billion USD or 10 million SOL locked up in staking
• The alliance engages with various governmental bodies, including the House Financial Services Committee, Senate Banking Committee, SEC, CFTC, and international regulators
• Hong Kong recently approved staking services
• A bipartisan group of senators, led by Cynthia Lummis, questioned the SEC about not allowing staking in ETFs in December
• Canary Capital, in partnership with Marinade, filed an S1 with the SEC for a Canary Marinade Solana Staked ETF
• The first time the alliance met with Treasury about staking taxation issues was in 2019
• A standalone bill was introduced last year to clarify that both mining and staking rewards should be taxed at the time of sale

Top quotes

1. "We quickly realized that in order for them to go to market effectively, we would need some sort of regulatory clarity. And on both the security side and also on the tax side."

2. "We've seen more from them on staking and engaging with the industry in the past four months than we have in the past four years when I talk about constructive engagement."

3. "These are technical services, not financial services."

4. "We need the same treatment for staking as we have for proof of work mining."

5. "Commissioner Peirce said at SEC speaks that she personally supports guidance on proof of stake."

6. "So it's constant education."

7. "I'm hopeful that this year we'll see it."

8. "Should these staking rewards be taxed at the time of creation or at the time of sale? And we say at the time of sale, it should be treated like all other created property."

Questions Answered

What is the Proof of Stake Alliance and when was it founded?

The Proof of Stake Alliance is a trade association founded in 2019 to address regulatory and policy issues related to staking in the cryptocurrency industry. It was established when the first Proof of Stake chains were launching and staking-as-a-service businesses were beginning to commercialize their offerings, recognizing the need for regulatory clarity to effectively enter the market.

How much progress has been made in achieving regulatory clarity for staking?

According to Alison Mangiero, the industry is about 25% of the way towards achieving full regulatory clarity for staking. While this represents significant progress, especially in terms of engagement with regulatory bodies like the SEC, there is still a long way to go. The alliance is pushing for specific staking guidance similar to what has been issued for proof of work mining.

What are some common misconceptions about staking when discussing it with policymakers?

One of the main misconceptions is that lending and staking are the same thing. While both involve locking up assets, they serve very different purposes. Another misconception is that all staking is the same across different blockchain networks. Educating policymakers on the differences between native staking, liquid staking, and how staking works on various chains is a constant challenge.

What is the current status of Solana staking ETFs in the US?

While Ethereum ETFs were approved last year, they were instructed to remove staking from their S1 filings. However, there is growing interest and potential for Solana staking ETFs. Canary Capital, in partnership with Marinade, has filed an S1 with the SEC for a Canary Marinade Solana Staked ETF. Mangiero expressed optimism about seeing a Solana staking ETF in the US, potentially within the year.

How are staking rewards currently taxed, and what changes are being proposed?

Currently, the IRS guidance suggests treating staking rewards as services income, which the Proof of Stake Alliance disagrees with. The alliance argues that staking rewards should be taxed at the time of sale, not at the time of creation, similar to other created property. A standalone bill was introduced last year to clarify that both mining and staking rewards should be taxed only at the time of sale, but this has not yet been enacted into law.