SEC Clarifies Liquid Staking is Not Subject to Securities Laws

The SEC has issued a staff statement stating that liquid staking participants, including depositors and providers, do not need to worry about securities law disclosures. The statement specifically addresses liquid staking, where participants deposit covered crypto assets into a third-party staking protocol provider, which provides receipt tokens to the depositors. The statement suggests that any crypto industry participant who follows the guidance will not be sued by the regulator.

The U.S. Securities and Exchange Commission (SEC) has issued a staff statement clarifying that participants in liquid staking activities do not need to worry about securities law disclosures. This statement, released on August 5, 2025, specifically addresses liquid staking, where participants deposit covered crypto assets into a third-party staking protocol provider, which in turn provides receipt tokens to the depositors.

According to the SEC, liquid staking providers do not need to register their transactions under the Securities Act. The statement specifies that the activities of liquid staking providers, including their roles in earning and distributing rewards, slashing, and minting, issuing, and redeeming staking receipt tokens, do not fall under securities offerings. This guidance is part of the SEC's broader effort to provide clearer regulatory frameworks for emerging technologies and financial activities in the crypto space.

The new statement suggests that any crypto industry participant who follows this guidance will not be subject to regulatory action by the SEC. The statement emphasizes that the deposited crypto assets cannot be part of or subject to an investment contract. Additionally, the liquid staking provider does not decide how, when, or how much of a depositor’s covered crypto assets to stake, acting merely as an agent in the staking process.

The crypto market has shown a mixed response to the SEC's clarification. While tokens tied to liquid staking protocols like Lido, Jito, and Rocket Pool saw marginal increases after the statement, they are still down on the day's trading. Industry experts expect this clarification to help expedite the approval of crypto staking products for inclusion in exchange-traded funds (ETFs).

This statement is the latest in a series of clarifications from the SEC regarding crypto activities. It follows similar guidance on other forms of staking and the non-securities status of protocol staking on proof-of-stake networks. The SEC's Project Crypto initiative, announced last week, aims to align securities laws with advancements in crypto and blockchain technologies.

The new guidance is a significant development for the crypto industry, providing much-needed clarity and potentially accelerating the integration of crypto assets into traditional financial markets.

References:
[1] https://www.coindesk.com/policy/2025/08/05/liquid-staking-doesnt-run-afoul-of-securities-laws-sec-says
[2] https://www.fxstreet.com/cryptocurrencies/news/sec-says-liquid-staking-does-not-constitute-securities-offering-202508060021
[3] https://www.sec.gov/newsroom/speeches-statements/corpfin-certain-liquid-staking-activities-080525