The U.S Securities and Exchange Commission has issued a staff statement clarifying that liquid staking is not classified as a security, paving the way for clearer digital asset regulation.
Liquid staking is a process where an individual stakes a specific cryptocurrency and receives staked tokens that work as proof that the individual has staked crypto on the protocol.
“The statement clarifies the division’s view that, depending on the facts and circumstances, the liquid staking activities covered in the statement do not involve the offer and sale of securities,”
– the regulator stated this referring to the Securities Act of 1933 and the Securities Exchange Act of 1934.
Defining Securities For Liquid Staking on Blockchain
In the staff statement, the SEC defined liquid staking as the process of staking cryptocurrencies via a protocol and receiving a “liquid staking receipt token,” which serves as evidence of the staker’s ownership.
Under Chair Paul Atkins, the SEC has adopted a more permissive stance on digital assets, moving away from the “regulation by enforcement” approach of former Chair Gary Gensler.
Recent actions include a May clarification that proof-of-stake protocols are not securities transactions and a July 29 approval of in-kind creations and redemptions for Bitcoin and Ether ETFs, allowing direct asset exchanges for ETF shares.
SEC Championing The Pro Crypto Movement
The SEC also launched Project Crypto, an initiative to revamp the U.S. regulatory framework for cryptocurrency trading, following recommendations from the White House’s Working Group on Digital Assets. The U.S. crypto industry is benefiting from policy changes, including the GENIUS Act for stablecoins, House approval of market structure reforms, and anti-CBDC legislation, all aimed at enhancing digital asset accessibility.
Growing Interest in Liquid Staking
Liquid staking is a major sector in crypto, with a total value locked (TVL) of approximately $67 billion across protocols, per DefiLlama, including $51 billion on Ethereum. Institutional interest is rising, with firms like Jito Labs, VanEck, and Bitwise pushing for approval of liquid staking strategies in Solana (SOL)-based exchange-traded funds (ETFs).
