The U.S. Securities and Exchange Commission (SEC) has provided significant clarity regarding the classification of liquid staking activities and their associated tokens, offering relief to many participants in the decentralized finance (DeFi) space.
Understanding the SEC's Classification
The SEC's Division of Corporation Finance recently issued staff guidance stating that liquid staking, and the resulting staking receipt tokens (SRTs), do not automatically qualify as securities offerings requiring registration. This determination hinges on the understanding that liquid staking involves depositing crypto assets to receive SRTs, which function as receipts evidencing ownership of the staked assets and any rewards, while crucially maintaining liquidity. The agency's legal analysis, applying the Howey Test, found that the role of liquid staking providers is largely administrative or ministerial. Since providers facilitate staking without entrepreneurial or managerial efforts that create an investment contract, and SRTs are merely receipts for non-security assets, these activities generally fall outside the scope of securities transactions.
Crucial Nuance and Future Considerations
Despite this positive development, the SEC's statement is not a blanket approval for all liquid staking implementations. The regulator explicitly clarified that this view does not extend to providers whose functions go beyond purely administrative roles or to structures that deviate from the described model. This means that while many existing SRTs may not be considered securities under this guidance, certain circumstances could still lead to a securities offering classification. This update builds upon earlier staff statements concerning other forms of protocol staking—such as self-solo, delegated, and custodial—which also generally do not require registration. Together, these statements help to delineate more precise boundaries for staking under federal securities laws, though they consistently emphasize the need for fact-specific assessments.
