Not All Staking Is Securities, Says SEC in New Guidance

In a statement released on August 5, the agency explained that some of these setups may not fall under federal securities laws, depending on how they are structured.

The SEC’s update focuses on a process where users lock up their cryptocurrency through a staking protocol and receive a token in return. This token, often called a liquid staking receipt, shows that the person still owns the original crypto, even though it is tied up in staking.

Did you know?

Want to get smarter & wealthier with crypto?

Subscribe - We publish new crypto explainer videos every week!

What is Impermanent Loss in Crypto? (Explained With Animations)

SUBSCRIBE

ON YOUTUBE

These tokens can usually be traded or used elsewhere while the original assets stay locked.

In its explanation, the SEC stated that these activities, when structured a certain way, do not necessarily count as offering or selling a security. The agency based this view on the specific facts and context of each setup.

The SEC referred to parts of the Securities Act of 1933 and the Securities Exchange Act of 1934 to support its reasoning.

SEC Chair Paul Atkins called the announcement a helpful step toward clarifying which crypto activities the agency sees as outside its authority.

This clarification arrives as more firms push for approval of liquid staking exchange-traded funds (ETFs). Companies like Jito Labs, VanEck, and Bitwise are asking the SEC to allow ETFs tied to Solana SOL $204.63 that use similar staking setups.

The SEC recently introduced a new plan called Project Crypto. What does it include? Read the full story.