The US Securities and Exchange Commission (SEC) has issued a new staff statement clarifying that some cryptocurrency liquid staking activities do not qualify as securities offerings, marking an important step towards clearer digital asset regulation.
According to the SEC, the classification depends on specific facts and circumstances but generally indicates that these liquid staking operations do not involve the offering or sale of securities, referencing key provisions from the Securities Act of 1933 and the Securities Exchange Act of 1934.
The SEC defines liquid staking as a process where users stake digital assets via a protocol and receive a liquid staking receipt token. This token acts as proof of ownership for the staker, allowing more flexible use of staked assets.
This guidance comes amidst growing institutional interest in liquid staking exchange-traded funds (ETFs), with companies such as Jito Labs, VanEck, and Bitwise encouraging the SEC to approve liquid staking strategies for Solana-based funds.
Liquid staking has become a significant segment within the crypto industry, with total value locked (TVL) approaching $67 billion according to DefiLlama. Ethereum alone holds $51 billion of this TVL, highlighting its prominence in the market.
Related: Digital gold rush intensifies as Tether Gold surges, institutions double down on BTC
Progressive SEC Regulation under Chair Paul Atkins
This announcement aligns with the SEC’s Project Crypto initiative, aimed at updating the regulatory framework around cryptocurrency trading in the US, initiated in response to recommendations from the White House’s Digital Assets Working Group.
Since his appointment, SEC Chair Paul Atkins has steered the agency toward a more tolerant digital asset policy, departing from the prior strict enforcement stance. This shift included a May clarification affirming that proof-of-stake blockchain protocols should not be considered securities transactions.
Under Atkins’s leadership, the SEC has also advanced measures to facilitate the operation of cryptocurrency ETFs. Notably, the approval of in-kind creations and redemptions for Bitcoin and Ether ETFs now allows authorized parties to exchange ETF shares directly for underlying crypto assets rather than cash, enhancing ETF efficiency.
Further boosting the crypto sector’s progress, recent policy reforms like the passage of the GENIUS Act—focused on stablecoin regulation—and House approvals related to market structure and anti-CBDC laws aim to foster wider digital asset adoption in the United States.
Related: SEC ends regulation through enforcement, praises tokenization as innovation
