Overview

• The Division of Corporation Finance stated that liquid staking activities and associated staking receipt tokens do not constitute securities offers requiring registration.
• Liquid staking is defined as depositing covered crypto assets with a provider in exchange for one-for-one receipt tokens that preserve liquidity and evidence ownership of staked assets and rewards.
• Applying the Howey test, staff concluded that providers perform solely administrative or ministerial functions and that secondary-market sales of these tokens likewise fall outside registration requirements.
• Major protocols such as Lido and Jito are now formally cleared to issue staking tokens and distribute rewards without SEC registration, a move some observers say could pave the way for staking in spot crypto ETFs.
• Commissioner Caroline Crenshaw criticized the guidance as nonbinding, narrowly focused on specific fact patterns and lacking grounding in real-world operations, warning firms that deviate may face enforcement risk.