SEC Releases Statement on Liquid Staking

The staff in the SEC’s Division of Corporation Finance (the “Division”) has released a statement on “liquid staking,” which can be defined as a type of protocol staking in which owners of covered crypto assets deposit such assets with a third-party provider of protocol staking services and receive newly created crypto assets in return to demonstrate that the deposited assets, as well as any rewards that accrue to them, are owned by the depositors. Among other views, the Division staff expresses its belief that liquid staking activities (as defined in the statement) associated with protocol staking “do not involve the offer and sale of securities” under the Securities Act of 1933 or the Securities Exchange Act of 1934 and, accordingly, do not need to be registered with the SEC.

The statement is part of the Commission’s effort “to provide greater clarity on the application of the federal securities laws to crypto assets.”

For more information, see the press release — as well as the statements by SEC Commissioners Hester Peirce and Caroline Crenshaw — on the SEC’s Web site.