Regulatory clarity for programmatic rewards and staking

The SEC Division of Corporation Finance issued a no-action letter on September 29, 2025, stating that it would not recommend enforcement against a blockchain token issuer if its programmatic token transfers follow specific rules. This decision suggests that token flows for provider payments and computation payments do not satisfy the Howey test. The programmatic distributions depend on the efforts of network providers and resource providers rather than a central manager. The Foundation’s role remains limited, ministerial, and ancillary. It focuses on educating the industry and coordinating among stakeholders. Marketing for the token emphasizes network utility rather than an expectation of profits. The decision also notes that any appreciation in token value results from market forces and network effects rather than managerial efforts. Commissioner Hester M. Peirce supported this decision. She noted that the economic reality of such projects differs from capital-raising transactions. The SEC also issued a no-action letter on September 30, 2025, regarding the use of state trust companies as crypto custodians. These developments provide a compliance lane for firms that structure their activity carefully. I find the focus on code-based reward mechanics a positive step for the industry. Will this trend of no-action letters continue for all major staking protocols?

Figment expands PoS access via Coinbase Prime

Figment manages more than $18 billion in assets under stake. Its integration with Coinbase Prime enabled over $2 billion in staked assets since the relationship began in early 2024. The companies most recently supported Grayscale in the launch of the first U.S. ETH ETP with staking. This integration now includes a broad set of Proof-of-Stake networks.

Lewis Han, the Head of Staking Sales at Coinbase, stated that the integration gives institutions more flexibility to select high-quality providers like Figment. This partnership allows clients to manage staking, trading, and financing through one interface. The network support includes Solana, Sui, Aleo, Aptos, Avalanche, Axelar, Cardano, Celestia, Cosmos, EigenLayer, NEAR, and Polkadot. You should realize that this expansion helps increase validator diversity across the ecosystem. Figment serves over 1000 institutional clients, including asset managers, exchanges, and large token holders. The Coinbase Prime integration allows institutions to stake assets without moving tokens out of Coinbase custody. The relationship provides turnkey infrastructure and detailed staking reporting for institutional asset managers.

Technical requirements and the Pectra upgrade

The Ethereum Pectra upgrade, which activated in May 2025, introduced compounding validators. These 0x02 validators allow up to 2,048 ETH per validator and automatically compound rewards. This feature helps institutions with large ETH positions avoid the 32 ETH limit found in legacy 0x01 validators. Figment provides support for both validator types. I think the move toward validator consolidation simplifies operations for large holders.

Institutions must plan for risks like slashing, downtime, and liquidity constraints. Traditional staking often requires waiting 7 to 21 days for unbonding. Multi-party computation technology helps protect these assets by distributing cryptographic key shares across multiple environments. This architecture removes single points of failure and provides better governance. I find the ability to combine validators into fewer operations a significant technical benefit. Multi-party computation also provides gas efficiency and universal compatibility compared to multisig solutions. The Pectra upgrade also allows for partial withdrawals from a staked balance. Institutions must perform due diligence on validator performance, fee structure, and slashing history. Solo staking requires technical expertise and internal accountability, whereas delegated staking reduces the operational burden.