- SEC clarifies liquid staking tokens aren’t securities.
- Guidance affects Ethereum and Solana.
- Potential for new liquid staking products.
The SEC’s Division of Corporation Finance clarified most liquid staking is not a security under federal law, impacting key blockchains like Ethereum on August 5, 2025.
This guidance could boost institutional participation in DeFi, alleviating regulatory fears around Ethereum and Solana’s staking ecosystems.
SEC’s Stance on Liquid Staking
On August 5, 2025, the US SEC’s Division of Corporation Finance clarified that liquid staking doesn’t typically qualify as a securities offering. This is contingent on arrangements lacking managerial third-party involvement and tokens being tied to underlying crypto assets.
The SEC’s guidance impacts major blockchain protocols like Ethereum and Solana. It removes uncertainty over the classification of liquid staking tokens as securities. The decision is based on the absence of investment-like arrangements in typical liquid staking activities.
Industry Impact and Opportunities
The regulatory clarity potentially drives institutional interest and liquidity in liquid staking tokens (LSTs). This could lead to product innovations, including the introduction of liquid staking ETFs, according to SEC staff analysis. Ethereum and Solana are among those most affected.
Today, the Division of Corporation Finance spoke in the form of a statement on liquid staking activities that purports ‘to provide greater clarity …’ But instead of clarifying the legal landscape, today’s statement … only muddies the waters. — Caroline A. Crenshaw, Commissioner, SEC
Financial markets may see shifts as institutional investors engage more with LSTs. This development is viewed as a vote of confidence for blockchain ecosystems using liquid staking, fostering new opportunities within decentralized finance platforms.
Historical Context and Future Prospects
Historical trends show SEC’s prior actions had influenced crypto markets. Previous guidance excluded liquid staking, creating uncertainty now partially resolved. Loopholes remain, as future reclassification of underlying assets could impact arrangements.
The guidance’s outcome may shape the regulatory future of DeFi protocols, encouraging further engagement in the space. While not conclusive, it signals a shift towards comprehensive understandings of innovative staking methods, urging caution in evolving market practices.
