SEC Clarifies Liquid Staking Not Subject to Securities Laws

The U.S. Securities and Exchange Commission (SEC) has stated that certain liquid staking activities and the related tokens are not considered securities, delivering a key regulatory clarification for the cryptocurrency industry [1]. In a statement issued by the SEC’s Division of Corporation Finance, the agency clarified that transactions involving liquid staking—where crypto holders deposit assets with a provider or in a decentralized finance (DeFi) protocol—do not involve the offer or sale of securities under the 1933 or 1934 Securities Acts [2]. This means that such activities are not subject to the registration requirements typically imposed on securities offerings.

The SEC further explained that liquid staking participants, including staking providers, do not need to register transactions under the Securities Act, provided the activities fall within the outlined framework. This guidance applies specifically to "staking receipt tokens," which represent ownership of the deposited assets and any associated staking rewards. These tokens are not classified as securities because the underlying crypto assets themselves are not securities [3].

Under the Howey test, which is used to determine whether an investment constitutes a security, the SEC concluded that liquid staking providers perform administrative rather than entrepreneurial or managerial functions. They act as agents in facilitating the staking process and do not make investment decisions or guarantee returns. The agency emphasized that if staking providers engage in more complex activities beyond basic staking, the securities laws may still apply [4].

The clarification is seen as a critical step for the approval of spot Ether exchange-traded funds (ETFs), particularly those that incorporate staked Ether. ETF expert Nate Geraci noted that this statement removes the last major hurdle for the SEC to approve staking in such products. Staked Ether tokens are expected to play a role in managing liquidity within these ETFs, an area that had previously raised concerns [5]. BlackRock, for instance, has already filed for a staked Ether ETF, and its approval could allow the firm to offer investors additional yield opportunities.

The SEC’s guidance does not cover all staking-related activities and does not imply that any other crypto assets or tokens are not subject to securities laws. The Division of Corporation Finance reiterated that its views are not binding and that each case must be assessed individually. The agency emphasized that the statement aims to reduce uncertainty and encourage innovation while protecting investors [6].

Industry participants have responded positively to the clarification, viewing it as a significant development for platforms and users engaged in liquid staking. The statement highlights the SEC’s ongoing effort to provide regulatory clarity for emerging crypto activities without stifling innovation [1].

[1] https://www.sec.gov/newsroom/speeches-statements/corpfin-certain-liquid-staking-activities-080525

[2] https://www.sec.gov/newsroom/speeches-statements/peirce-staking-sequel-080525

[3] https://www.sec.gov/newsroom/speeches-statements/crenshaw-statement-liquid-staking-080525

[5] https://www.coindesk.com/policy/2025/08/05/liquid-staking-doesn-t-run-afoul-of-securities-laws-sec-says