Amanda Fischer Compares Liquid Staking to Lehman Risk

A recent warning from Amanda Fischer, former Chief of Staff to former SEC Chair Gary Gensler, has reignited concerns about the regulatory risks of liquid staking in the cryptocurrency space. Fischer drew a controversial comparison between the practice and the asset-rehypothecation strategies that contributed to the collapse of Lehman Brothers in 2008. She argued that the mechanism allows digital assets to be reused repeatedly with minimal oversight, creating systemic vulnerabilities [1].

Fischer’s remarks have sparked immediate backlash from industry leaders and legal experts who argue that her interpretation is both exaggerated and misaligned with current SEC guidance. Critics point out that liquid staking protocols like Ethereum’s Lido and Solana’s Jito have largely been excluded from securities regulations, suggesting that the agency already distinguishes between passive staking and more complex, leveraged products [2]. Blockchain attorney Kurt Watkins emphasized that the SEC’s approach focuses on cases where providers do not exercise discretion, which does not apply to the automated systems at the heart of liquid staking [2].

Fischer’s position has also been criticized as reflecting a centralized regulatory mindset. Austin Campbell, founder of Zero Knowledge Consulting, noted that regulators often struggle to understand the decentralized nature of blockchain systems, leading to mischaracterizations of their risks [2]. Matthew Sigel of VanEck questioned the consistency of Fischer’s statements, highlighting the contradiction between her claims that the SEC is "blessing" crypto and that the sector operates without oversight [2]. Mert Mumtaz of Solana’s Helius Labs further dismissed the analogy, arguing that transparent and decentralized systems are fundamentally different from the opaque, centralized structures of the 2008 crisis [2].

Despite the criticism, Fischer’s comments reflect a broader debate within the SEC and the wider financial regulatory community about how to classify and govern crypto assets. While Commissioner Hester Peirce has praised recent discussions around liquid staking as a step toward clarity, the agency remains divided on the appropriate approach [3]. Meanwhile, the industry continues to push forward with new products and institutional adoption, including the launch of funds targeting professional investors [4].

The debate underscores the tension between innovation and oversight in the rapidly evolving crypto space. As regulators seek to define legal boundaries for liquid staking, market participants face increasing uncertainty. Fischer’s warning highlights the need for stronger safeguards and greater transparency, particularly as asset reuse becomes a more prominent feature of decentralized finance [5].

Source:

[1] Altcoin. [Ex-SEC Aide Warns of Liquid Staking Risks.](https://www.altcoinbuzz.io/cryptocurrency-news/ex-sec-aide-warns-of-liquid-staking-risks/)

[2] AInvest. [Former SEC Chief of Staff Compares Liquid Staking to Lehman Collapse.](https://www.ainvest.com/news/sec-chief-staff-compares-liquid-staking-lehman-collapse-crypto-sector-pushes-2508/)

[3] Regulatory Compliance Watch. [SEC Commissioner Peirce Praises Liquid Staking Comments.](https://www.regcompliancewatch.com/sec-commissioner-peirce-praises-liquid-staking-comments-as-providing-clarity/)

[4] Blockchair. [Backlash as ex-SEC Chief of Staff Links Liquid Staking to Lehman.](https://blockchair.com/news/ex-sec-chief-of-staff-likens-liquid-staking-to-lehman-brothers-collapse--14388e0fe7db28f9)

[5] Kostolany.ai. [Amanda Fischer Warns on Liquid Staking Risks.](https://kostolany.ai/news/amanda-fischer-warns-liquid-staking-risks-systemic-collapse)