SEC Declares Liquid Staking Tokens Not Securities Citing Agent Role

The U.S. Securities and Exchange Commission (SEC) has provided regulatory clarity on liquid staking tokens, affirming that they are not considered securities under the 1933 and 1934 Securities Acts. The clarification, issued by the SEC’s Division of Corporation Finance, addresses liquid staking—a process where crypto assets are staked through a protocol or service, and the staker receives a tokenized receipt representing ownership of the staked assets and associated rewards [1]. This development marks a significant shift in the regulatory landscape for decentralized finance (DeFi) protocols, particularly those such as Lido and Rocket Pool, which have previously operated in a gray area regarding their compliance obligations [2].

The SEC’s guidance explains that, in most cases, liquid staking activities do not constitute the offer or sale of securities. The key reasoning is that the service provider, often a protocol or platform, functions as an agent rather than an investment manager. As such, they do not undertake the managerial or entrepreneurial efforts that would render the activity a securities offering [3]. This interpretation aligns with earlier statements by SEC Commissioner Hester Peirce, who has consistently advocated for a case-by-case approach to crypto regulation [4].

The announcement builds on prior SEC guidance regarding protocol staking and reaffirms the division’s position that certain crypto activities fall outside the agency’s jurisdiction, provided they do not meet the traditional definition of a security under the Howey test—specifically, the investment of money in a common enterprise with the expectation of profit from another’s efforts [5]. This clarity is expected to reduce compliance burdens for DeFi protocols and encourage innovation in the space, as platforms can now operate with greater legal certainty [6].

Market reactions to the announcement have been modest, with governance tokens such as Lido DAO experiencing slight price increases. Analysts suggest the ruling could pave the way for greater institutional participation in DeFi and crypto staking more broadly. With regulatory uncertainty reduced, the path to Ethereum-based ETF approvals is now viewed as more feasible, given that the tokenized staking receipts are no longer considered securities [7].

The SEC’s decision also reflects the broader goals of its Project Crypto initiative, which aims to provide consistent and clear guidance on the application of federal securities laws to crypto activities. Chairman Paul S. Atkins emphasized that the statement represents a significant step in clarifying the agency’s view on activities that fall outside its jurisdiction, thereby fostering a more predictable regulatory environment for market participants [8].

Sources:

[1] Securities and Exchange Commission Division of ... (https://www.sec.gov/newsroom/press-releases/2025-104-securities-exchange-commission-division-corporation-finance-issues-staff-statement-certain-liquid)

[2] Statement on Certain Liquid Staking Activities (https://www.sec.gov/newsroom/speeches-statements/corpfin-certain-liquid-staking-activities-080525)

[3] Staking Sequel – Comments on Division of Corporation ... (https://www.sec.gov/newsroom/speeches-statements/peirce-staking-sequel-080525)

[4] Response to Staff Statement on Certain Liquid Staking ... (https://www.sec.gov/newsroom/speeches-statements/crenshaw-statement-liquid-staking-080525)

[5] No Registration Required SEC Clarifies Liquid Staking Rules (https://crypto-economy.com/sec-clarifies-liquid-staking-rules-no-registration-required/)

[7] SEC Clarifies Liquid Staking Not Subject to Securities Laws (https://www.ainvest.com/news/sec-clarifies-liquid-staking-subject-securities-laws-2508/)

[8] SEC Clarifies Liquid Staking as Non-Securities Activity (https://phemex.com/news/article/sec-clarifies-liquid-staking-as-nonsecurities-activity_14470)