SEC Staff Statement on Liquid Staking
On August 5, 2025, the Division of Corporation Finance of the U.S. Securities and Exchange Commission (SEC) released an important staff statement that delineates regulations surrounding liquid staking activities, following up on its previous guidelines from May 29, 2025, concerning Protocol Staking. The staff statement reinforces the commission’s views and clarifies how liquid staking is handled under securities law.
Understanding Liquid Staking
Liquid staking involves users receiving a Staking Receipt Token (SRT) in exchange for staking their Covered Crypto Assets through a third-party service or protocol. The SEC emphasizes that if certain factual criteria are satisfied, such liquid staking does not equate to the offer or sale of securities as outlined in Section 2(a)(1) of the Securities Act or Section 3(a)(10) of the Exchange Act.
Key Conditions for Compliance
This statement specifies key conditions that must be adhered to, including the stipulation that service providers only conduct administrative functions without exercising discretionary control over staking decisions. They also must refrain from guaranteeing investment returns, thereby staying clear of the definitions of “efforts of others” and “expectation of profits” as dictated by the Howey Test.
The recent guidance builds upon the earlier Protocol Staking Statement, which previously examined methods of solo, custodial, and delegated staking. It further clarifies that only liquid staking frameworks aligned with their defined conditions will be granted the same regulatory leeway. If these strict criteria are not adhered to, the SEC’s previous safe-harbor perspective no longer applies.
Classification of Staking Receipt Tokens
The SEC treats SRTs as acknowledgment receipts akin to warehouse receipts, indicating ownership of the staked assets rather than classifying them as securities. Their analysis hinges on the absence of entrepreneurial or managerial efforts that produce yield. As outlined in the statement, Liquid Staking Providers function purely as agents, managing assets with no decision-making influence on staking strategies and without yield guarantees.
Legal Implications and Risks
Additionally, both this August statement and the May 29 statement are non-binding and purely reflect the perspectives of the SEC’s Corporation Finance staff. The assumptions detailed in the guidance are crucial, as failure to comply rigidly will invalidate any safe harbor protections. Notably, stablecoin “staking,” rehypothecation, or governance-related DAO staking models require independent legal interpretations and do not fall under the safe harbor insights provided in these statements.
Legal risks linger should staking providers engage in discretion, offer guarantees, or extend service beyond the restricted administrative role. Firms like ours are dedicated to assisting clients with matters relating to token structure, staking design, governance models of DAOs, and overall crypto services, ensuring alignment with the evolving perspectives of the SEC staff. For discussion on staking frameworks or token issuance in line with these latest SEC positions, reach out to us for consultation.
