Ethereum News Today: SEC Exempts Liquid Staking Tokens from Securities Classification

The U.S. Securities and Exchange Commission (SEC) has officially confirmed that liquid staking activities, along with their associated receipt tokens, do not constitute securities under U.S. federal law [1][2][3]. This regulatory clarification was communicated through recent statements and guidance from the agency, resolving a long-standing ambiguity in the crypto market. The decision covers major liquid staking platforms such as Ethereum’s Lido and Solana’s Jito, effectively exempting their operations from the requirements of securities registration with the SEC [4][5].

According to the SEC’s guidance, liquid staking—where investors stake their crypto assets and receive tokens that can be used for yield generation, DeFi protocols, or trading—does not involve the offer or sale of securities under specific conditions [2][3]. The agency highlighted that these activities do not meet the criteria for an investment contract as defined by the Howey test. This distinction is crucial for the development of the crypto ecosystem, as it provides much-needed clarity and reduces the risk of regulatory overreach.

The exclusion also extends to popular liquid staking tokens such as stETH (staked Ether) and rETH (Rocket Pool ETH), which are now explicitly recognized as non-securities [1][3]. This development is expected to encourage broader participation in staking and DeFi protocols, as market participants can now operate with greater assurance that their activities fall outside the scope of traditional securities laws. Institutional investors, in particular, are likely to benefit from this clarity, as it facilitates the integration of liquid staking tokens into financial products such as ETFs, potentially enhancing liquidity and market accessibility.

The SEC’s decision marks a pivotal moment in the regulatory normalization of crypto markets [2][3]. By removing the threat of securities enforcement against common liquid staking activities, the agency has enabled innovation while maintaining a balanced approach to consumer protection. This clarity is especially important for institutional investors and crypto-native platforms that rely on liquid staking for yield generation and liquidity provision.

While the guidance does not cover all aspects of the crypto industry, the SEC’s formal stance on liquid staking represents a significant win for the sector. It sets a precedent that could influence future regulatory developments in related areas and supports the broader integration of blockchain-based financial products into mainstream markets [4][5].

Source:

[1] SEC Exempts Liquid Stakers Like Ethereum's Lido, Solana's ... (https://finance.yahoo.com/news/sec-exempts-liquid-stakers-ethereum-184458968.html)

[2] SEC Affirms Liquid Staking Not a Security Under U.S. Law (https://www.ainvest.com/news/sec-affirms-liquid-staking-security-law-2508/)

[3] SEC Clarifies Liquid Staking Tokens Are Not Securities (https://www.ainvest.com/news/sec-clarifies-liquid-staking-tokens-securities-2508-85/)

[4] SEC recognizes Lido and Jito and exempts liquid staking ... (https://portalcripto.com.br/en/sec-reconhece-lido-e-jito-e-isenta-staking-liquido-de-regras-de-valores-mobiliarios/)

[5] SEC Says Liquid Staking and Receipt Tokens May Not Be ... (https://www.mexc.com/news/sec-says-liquid-staking-and-receipt-tokens-may-not-be-securities-under-certain-structures/63853)