Statement Summary
The SEC’s Division of Corporation Finance has issued a statement clarifying the federal securities laws’ application to liquid staking in the crypto space. Liquid staking involves using a protocol to stake crypto assets and receiving a liquid staking receipt token as proof of ownership and accrued rewards. The SEC indicates that, depending on specific facts and circumstances, these activities may not constitute the offer and sale of securities under existing laws.
SEC Chairman Paul S. Atkins emphasized the importance of providing guidance on crypto regulations, stating that this statement is a meaningful step in delineating what falls outside the SEC’s jurisdiction as part of the ongoing Project Crypto initiative.
Original Statement
The Securities and Exchange Commission’s Division of Corporation Finance today issued a statement regarding certain liquid staking activities. This statement aims to provide greater clarity on the application of federal securities laws to crypto assets, specifically addressing a type of protocol staking known as “liquid staking.”
Liquid staking refers to the process of staking crypto assets through a software protocol or service provider and receiving a “liquid staking receipt token” to evidence the staker’s ownership of the staked crypto assets and any rewards that accrue to them. The statement clarifies the division’s view that, depending on the facts and circumstances, the liquid staking activities covered in the statement do not involve the offer and sale of securities within the meaning of Section 2(a)(1) of the Securities Act of 1933 or Section 3(a)(10) of the Securities Exchange Act of 1934.
“Under my leadership, the SEC is committed to providing clear guidance on the application of the federal securities laws to emerging technologies and financial activities,” Chairman Paul S. Atkins said. “Today’s staff statement on liquid staking is a significant step forward in clarifying the staff’s view about crypto asset activities that do not fall within the SEC’s jurisdiction. I am pleased that the SEC’s Project Crypto initiative is already producing results for the American people.”
