SEC Confirms Liquid Staking Falls Outside Securities Laws

Highlights:

• The SEC confirms that liquid staking does not involve securities if providers do not control user assets or investment decisions.
• The SEC guidance could support staking features in Ethereum ETFs and reduce concerns over managing fund liquidity.
• Receipt tokens act as proof of ownership and rewards, so they are not securities unless linked to investment contracts.

The U.S. Securities and Exchange Commission has clarified that some liquid staking activities do not qualify as securities offerings. The agency addressed how receipt tokens work within specific staking models and whether they meet the legal definition of securities.

✅ SEC Clarifies: Liquid Staking Not a Securities Offering

🔥 The U.S. #SEC has confirmed that certain liquid staking activities do not qualify as the offer or sale of securities under federal law.

🔶 Key Takeaways:
🔹 The SEC’s Division of Corporation Finance clarified that… pic.twitter.com/4bUEZ7zGmJ

— Crypto Club (@CryptoClubHQ) August 6, 2025

The statement explains that with liquid staking, users can deposit their digital assets with a protocol or service and receive tokens denoting ownership. These receipt tokens verify the stake of the user and the returns created over a period of time. The SEC noted, however, that these arrangements do not have to be registered so long as they adhere to some conditions.

The staked assets should not be securities themselves to enjoy the exemption. In addition, the staking provider must narrow its involvement to technical or administrative assistance. If providers perform no entrepreneurial or managerial functions, the receipt of tokens does not represent investment contracts. The regulatory body used the Howey Test to explain its position. The test looks for profit expectations from others’ efforts. The yield associated with liquid staking is through the protocol and not the activity of the provider. Therefore, under these facts, the offer or sale of staking receipt tokens does not count as a securities offering.

SEC Confirms Liquid Staking Exemption May Support ETF Progress

The clarification coincides with increasing interest in including staking strategies in spot Ethereum exchange-traded funds. Firms such as VanEck, Bitwise, and Jito Labs have proposed funds that rely on liquid staking models. The new guidance may ease concerns that once slowed such approvals.

Nate Geraci, president of NovaDius Wealth, said the statement helps remove a key issue. He posted on X that receipt tokens could now help manage ETF liquidity. This comes after the SEC approved in-kind creations and redemptions for Bitcoin and Ether ETFs. These steps allow authorized participants to exchange ETF shares for crypto instead of cash.

SEC says certain liquid staking tokens are NOT securities…

Think last hurdle in order for SEC to approve staking in spot eth ETFs.

The reason?

Liquid staking tokens will be used to help manage liquidity w/in spot eth ETFs, something that was a concern for SEC. pic.twitter.com/tKJbEoQVNp

— Nate Geraci (@NateGeraci) August 5, 2025

Paul Atkins, current SEC Chair, has pushed for updated guidance since taking office. His administration has taken a different approach compared to the previous leadership. Instead of relying on enforcement, Atkins supports formal statements and structured updates. The agency’s recent moves show a shift toward more defined frameworks. The agency associated this release with its wider Project Crypto drive. The project includes updates on custody, distribution, and other crypto-related practices. According to Atkins, these efforts follow the White House’s Working Group recommendations.

The guidance reflects an effort to provide legal clarity without changing existing laws. It also enables the industry players to operate within certain parameters. With additional companies fast-tracking their preparations in staking-related financial products, the timing of such a statement is a clear sign of strategic thinking by the agency.

Receipt Tokens Serve as Ownership Proof

The SEC, in its statement, also addressed the purpose of receipt tokens. These tokens act as proof of ownership, not as tools for generating new profits. Their worth is based on the earned rewards gained by staking, not the actions of the providers. Legal experts noted the possible impact on other digital tools. They noted that the logic could extend to wrapped tokens and bridge receipts. If these tokens serve only as records, they may avoid securities rules. The SEC warned that changes in structure could lead to different outcomes.