SEC Staff Gives Green Light to Certain Liquid Staking – Here’s What It Means for DeFi
On August 5, 2025, the SEC’s Division of Corporation Finance dropped a new staff statement clarifying how U.S. securities laws apply to liquid staking. For the DeFi world, this is big news, not because it changes the law, but because it removes a major cloud of uncertainty that’s been hanging over liquid staking protocols.
Here’s the short version: If you’re running a liquid staking service as described in this statement, the SEC staff doesn’t think you’re offering or selling securities.
What Is Liquid Staking, Really?
Liquid staking is like staking, but with an added twist:
You deposit your crypto (e.g., ETH) into a staking service.
That service stakes it on your behalf, earning rewards.
In return, you get a “Staking Receipt Token” , basically a token that proves you own the staked crypto (plus any rewards).
You can trade, lend, or use that receipt token in DeFi while your original crypto is still staked.
In other words, you keep your staking rewards and your liquidity.
What the SEC Statement Says
The SEC staff’s view (important note: it’s staff guidance, not a binding law) is that:
Liquid staking itself — if done in a certain way — isn’t a securities transaction.
Staking Receipt Tokens aren’t securities — unless the underlying crypto asset itself is part of an “investment contract.”
You don’t need to register these activities under the Securities Act or Exchange Act if you stick to the model described.
Why They Say It’s Not a Security
The SEC applies the Howey test to decide if something is an “investment contract” (and therefore a security). For liquid staking:
No investment contract: You still own your crypto.
No “managerial or entrepreneurial” efforts: The liquid staking provider is basically just a middleman — they stake your tokens, maybe choose a node operator, and pass on rewards (minus fees). That’s considered administrative, not “building a business” for you.
Rewards come from the network protocol, not the provider’s business decisions.
Important Caveats
This is not a blanket free pass for all liquid staking services.
The statement doesn’t apply if:
The provider decides when or how much of your crypto to stake.
The provider guarantees a certain amount of rewards.
The provider offers ways to use Staking Receipt Tokens to earn additional returns (beyond just holding them) as part of its own service.
Basically, if you go beyond being a neutral staking facilitator, you might cross into securities territory.
Why This Matters for DeFi Platforms
This is one of the clearest “green lights” the SEC has given to a crypto activity in recent years — and it’s coming at a time when regulatory uncertainty has been pushing projects offshore.
For compliant DeFi protocols:
It’s clarity — you can design your liquid staking feature to fit within these guidelines and reduce legal risk in the U.S.
It supports composability — receipt tokens can move freely in DeFi without automatically being tagged as securities.
It keeps staking rewards flowing without locking up liquidity.
However, this is still staff guidance, not binding law, and the SEC could take a different view in enforcement actions where facts differ from this model.
Bottom Line
The SEC’s Corporation Finance Division is basically saying:
“If you run liquid staking like a neutral escrow service, we don’t think it’s a securities deal.”
For DeFi builders, this is a blueprint. Stick to administrative functions, let the protocol generate the rewards, and keep your hands off investment decisions — and you’ll have a much clearer regulatory path in the U.S.
