A Security, as defined by Investopedia, is as follows:
The term "security" refers to a fungible, negotiable financial instrument that holds some type of monetary value. It represents an ownership position in a publicly-traded corporation via stock; a creditor relationship with a governmental body or a corporation represented by owning that entity's bond; or rights to ownership as represented by an option.
Securities are determined by the Howey Test, a test that defines what U.S. Federal Securities Laws apply to, administered by the SEC. Under current interpretations of the Howey Test, Staking cryptocurrencies like Axion are exempt from consideration as securities.
For an in-depth breakdown of how staking cryptos are exempt, here is an excellent writeup from the Blockchain Association:
It is important to understand what it means when you interact with the Axion contract. This segment is an excerpt from the Axion Disclaimer page available on our website:
When you interact with Axion, you, as an investor, must have no expectation of any benefit, be it financial or otherwise, from any ETH sent to the Axion contract, or any AXN that your origin address receives. You must have no expectation of profit or reliance on the efforts of others. As explained above, AXN is purely a piece of inert computer code at a contract address on the Ethereum network. It can do absolutely nothing on its own. Every single AXN token that existed, currently exists, or will exist in the future, is caused to exist by a person creating it themselves as per the rules of the code that is executed by that person at the Axion Contract Address. You can mint this AXN yourself or by paying an Ethereum-based miner or group of miners.
Only you can mint your own AXN by running the Auction Code found at the Contract Address, and only you can stake your AXN by running the Staking Code found at the Contract Address, as it requires the private key you generated when you created your Ethereum wallet. All staked AXN is “burnt” or “destroyed” as stated above during the staking process, and upon completion of the stake, only you can mint your own AXN when you run the Withdraw Code found at the Contract Address. You, as an individual, perform all the work required to interact with AXN on your own, with no assistance or control by the Axion team.
Wherever possible, you agree there is no investment of money. You are just running computer code. Wherever possible, you agree there is no common enterprise. You are just running computer code on your own. There is no inherent financial value in Axion or its computer code, and you agree that no past, current, or future financial value is implied or guaranteed. Therefore there is no guarantee of any market conditions that would allow you to exchange your numbers in a database for numbers in another database at a favorable rate or valuation.
Cryptocurrencies are extremely volatile, based entirely on speculation, sentiment, and one’s own personal valuation. Bitcoin, the largest cryptocurrency in the world, has had many times where its valuation tumbled significantly, losing up to 94% of its valuation over the course of days or months- all while Bitcoin is considered the most stable and oldest cryptocurrency. All cryptos experience this high volatility, with valuations plunging or rising on an hourly basis. Some cryptos recover and experience exponential growth, but many fade into nothingness, with their users holding millions, billions, or trillions of those tokens that have absolutely no inherent value.
Axion pledges to do everything in its power to reduce volatility, provide long-term stable growth, create a safe place for enthusiasts and investors, and make staking, holding, and owning AXN a rewarding and satisfying experience.