Back
SEC: Liquidity Staking Activities Not Regarded as Securities

SEC: Liquidity Staking Activities Not Regarded as Securities

On August 5, the SEC clarified that properly structured liquid staking models for Ethereum, such as those used by Lido and Rocket Pool, are not considered securities, reducing regulatory uncertainty for crypto stakeholders.

ETH

Summary

The SEC issued a staff statement confirming that well-designed liquid staking programs, which issue receipt tokens representing staked assets, do not qualify as securities under U.S. law because they lack discretionary managerial control. This guidance distinguishes automated, protocol-driven staking from centralized models and is expected to boost market confidence in Ethereum.

Terms & Concepts
  • SEC: The U.S. Securities and Exchange Commission oversees and enforces federal securities laws.
  • Liquid Staking: A process where users stake cryptocurrencies and receive liquid tokens that represent their staked assets, allowing continued participation in DeFi.
  • Howey test: A legal framework used to determine whether an asset qualifies as a security based on investment of money and expectation of profits from others' efforts.