The US Securities and Exchange Commission (SEC) has elucidated that specific cryptocurrency liquid staking operations do not amount to securities offerings, a significant advancement in the agency’s ongoing endeavor to furnish clearer guidance on digital asset oversight.
“The announcement elucidates the division’s perspective that, based on the facts and circumstances, the liquid staking operations referenced in the announcement do not encompass the offer and sale of securities,” the regulator stated Tuesday, alluding to relevant sections of the Securities Act of 1933 and the Securities Exchange Act of 1934.
In its Staff Statement, the SEC characterized liquid staking as the procedure of staking digital assets via a protocol and obtaining a “liquid staking receipt token,” which acts as proof of the staker’s ownership.
“Today’s staff announcement on liquid staking represents a substantial step forward in clarifying the staff’s outlook on crypto asset activities that do not reside within the SEC’s authority,” SEC Chair Paul Atkins remarked in a statement.
The SEC’s clarification arrives amid growing institutional interest in liquid staking exchange-traded funds (ETFs), with entities like Jito Labs, VanEck, and Bitwise pleading with the agency to approve liquid staking strategies for Solana (SOL)-based funds.
Liquid staking has emerged as one of the largest subdomains in crypto, with a total value locked (TVL) approaching $67 billion across all protocols, as per DefiLlama. Ethereum alone represents $51 billion of that total.
Related: Crypto Biz: Digital gold rush intensifies as Tether Gold surges, institutions double down on BTC
SEC adopts a pro-crypto stance under Paul Atkins
The declaration follows the SEC’s initiation of Project Crypto — a comprehensive initiative to reformulate the regulatory framework for cryptocurrency trading in the United States. As SEC Chair Paul Atkins mentioned last week, the project was crafted in response to proposals from the White House’s Working Group on Digital Assets.
Since assuming office, Atkins has steered a more lenient stance regarding digital asset regulation, deviating from the agency’s previous “regulation by enforcement” position under former Chair Gary Gensler. That transition included a May clarification indicating that proof-of-stake protocols do not represent securities transactions.
Under Atkins’ guidance, the SEC has also undertaken significant actions to alleviate regulatory constraints on cryptocurrency exchange-traded funds (ETFs).
Notably, on July 29, the agency approved in-kind creations and redemptions for Bitcoin (BTC) and Ether (ETH) ETFs, permitting authorized participants to swap ETF shares directly for the underlying assets rather than for cash.
The US crypto sector is also gaining traction due to comprehensive policy reforms aimed at enhancing the accessibility of digital assets. These reforms include the enactment of the GENIUS Act, a landmark stablecoin legislation, and House sanctioning of market structure and anti-CBDC laws ahead of the August recess.
Related: SEC ends ‘regulation through enforcement,’ calls tokenization ‘innovation’
