SEC Clarifies Liquid Staking Not Subject to Securities Laws Under Certain Conditions

The U.S. Securities and Exchange Commission (SEC) issued a non-binding staff statement from the Division of Corporation Finance outlining its view that certain liquid staking activities do not constitute securities offerings under the current legal framework [1]. This statement, praised by SEC Chair Paul S. Atkins as a “significant step forward,” aims to provide clarity on how federal securities laws apply to these protocols [2]. Liquid staking typically involves locking up crypto assets through a protocol and receiving a token that represents ownership and staking rewards, with the SEC noting that such activities may not be subject to securities regulations depending on the specific circumstances [3].

Atkins emphasized the importance of this guidance in fostering regulatory certainty for the crypto industry, particularly as part of the SEC’s broader initiative known as Project Crypto [4]. Launched recently, the initiative seeks to modernize financial regulations to align with blockchain innovation and on-chain transactions [5]. In his remarks, Atkins stated that the SEC is committed to adapting its regulatory approach to support emerging technologies while ensuring investor protection [6]. This shift appears to align with the more crypto-friendly stance of the current administration and reflects a departure from the agency’s previous enforcement-driven strategy [7].

The statement has been interpreted as a positive signal for the crypto sector, as it suggests that some liquid staking activities may fall outside SEC jurisdiction [8]. However, analysts caution that the guidance is not a final ruling and is limited to the staff’s current interpretation. The applicability of the statement will depend on the specific facts of each arrangement [9]. While the SEC’s approach may encourage innovation and investment in liquid staking protocols, it also underscores the complexity of applying traditional securities laws to decentralized financial systems [10].

The clarity provided by the SEC is expected to benefit market participants by reducing uncertainty, particularly for platforms offering staking services [1]. However, the agency’s non-binding position does not eliminate the need for further regulatory developments or case-by-case assessments. As the SEC continues to refine its stance through initiatives like Project Crypto, the industry will likely monitor its actions for additional guidance [5].

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Source: [1] SEC.gov, Securities and Exchange Commission Division of Corporation Finance Issues Staff Statement on Certain Liquid Staking (https://www.sec.gov/newsroom/press-releases/2025-104-securities-exchange-commission-division-corporation-finance-issues-staff-statement-certain-liquid)

[2] Cointelegraph, US SEC says certain liquid staking activities fall outside of ... (https://cointelegraph.com/news/sec-certain-liquid-staking-activities-securities-laws)

[3] AInvest, SEC Clarifies Liquid Staking Isn't Security Under Protocol-Driven Structures (https://www.ainvest.com/news/sec-clarifies-liquid-staking-isn-security-protocol-driven-structures-2508/)

[4] TheStreet, SEC has a shocking update for crypto industry (https://www.thestreet.com/crypto/policy/sec-has-a-shocking-update-for-crypto-industry)

[6] CoinDesk, SEC: Liquid Staking Doesn't Run Afoul of Securities Laws (https://www.coindesk.com/policy/2025/08/05/liquid-staking-doesn-t-run-afoul-of-securities-laws-sec-says)

[7] CoinGape, SEC Clarifies Liquid Staking Isn't a Security Amid Project Crypto Push (https://coingape.com/sec-clarifies-liquid-staking-isnt-a-security-amid-project-crypto-push/)

[8] Coinpedia, SEC Says LSTs Aren't Securities: What's the Impact on ... (https://coinpedia.org/news/sec-says-lsts-are-not-securities-whats-the-impact-on-spot-crypto-etfs/amp/)

[9] AInvest, SEC Clarifies Liquid Staking Isn't a Security Offering (https://www.ainvest.com/news/sec-clarifies-liquid-staking-securities-offering-2508/)