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Not All Staking Is Securities, Says SEC in New Guidance

Key Takeaways

  • The US ​SEC stated that some liquid staking setups may not be securities, depending on how they are structured;
  • Users receive tradable tokens representing staked crypto, while the original assets remain locked;
  • The update comes as firms push for SEC approval of Solana-based liquid staking ETFs.

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Not All Staking Is Securities, Says SEC in New Guidance

The US Securities and Exchange Commission (SEC) has offered new guidance on how it views certain types of liquid staking.

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.

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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 $167.73 that use similar staking setups.

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

Aaron S. Editor-In-Chief
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.

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