Ethereum News Today: SEC Exempts Major Staking Protocols From Securities Laws

The U.S. Securities and Exchange Commission (SEC) has formally exempted major Ethereum and Solana staking protocols, including Lido and Jito, from securities laws [1]. This decision clarifies the regulatory status of liquid staking tokens such as stETH, mSOL, and jitoSOL, which will no longer be treated as securities under U.S. regulations. The move is seen as a critical step toward approving staking-based exchange-traded funds (ETFs) for both Ethereum and Solana. Analysts have noted that this exemption removes a major hurdle for the SEC’s broader regulatory framework around crypto staking and provides a precedent for other decentralized protocols [2].

The exemption applies to non-custodial staking mechanisms, allowing users to participate in network validation while retaining control of their assets. For Ethereum, Lido’s dominance—over 30% of all staked ETH—means the exemption protects a significant portion of the network’s economy. For Solana, Jito’s role in the platform’s staking and MEV (maximal extractable value) infrastructure suggests increased institutional interest may follow. The decision also opens the door for broader adoption of decentralized finance (DeFi) innovations, including restaking, liquid restaking, and cross-chain staking derivatives [1].

The market reacted mixedly to the news. Despite the regulatory clarity, Ethereum (ETH) traded slightly lower, down 1% on the day. Broader crypto markets also showed some red, with Bitcoin dipping 0.3% to $114,300 and Solana (SOL) down 4% to $164. However, the approval of staking protocols is expected to drive long-term stability and growth in the sector [3].

The ruling aligns with the SEC’s Project Crypto initiative, which seeks to provide clearer regulatory guidance for crypto markets. By exempting liquid staking tokens from securities laws, the SEC has taken a concrete step toward supporting innovation while maintaining investor protection. The precedent set by this decision could influence how other decentralized protocols are classified, particularly those without a central operator [1].

Experts have highlighted the significance of the ruling in the context of ETF approvals. Liquid staking tokens are often used to manage liquidity within spot ETFs, a key concern for the SEC. With this hurdle removed, the path for approval of staking ETFs appears clearer [2].

The broader crypto ecosystem welcomed the news. Lido and Jito, the two protocols granted exemptions, are now in a stronger position to scale their services without the looming threat of regulatory action. The clarity provided by the SEC is expected to encourage more institutional and retail participation in staking activities across both Ethereum and Solana networks [1].

Source:

[1] Morning Minute: SEC Gives Crypto Staking The Green Light (https://decrypt.co/333729/morning-minute-sec-gives-crypto-staking-the-green-light)