US SEC Declares Liquid Staking Isn’t a Security

SEC Greenlights Liquid Staking as Non-Security Activity

In a major clarification for the crypto industry, the U.S. Securities and Exchange Commission (SEC) has officially stated that certain forms of liquid staking are not considered securities offerings, according to a new Staff Statement released on Tuesday. The move is part of the agency’s ongoing commitment to reshape how digital assets are regulated in the U.S., particularly under Project Crypto, its newly launched regulatory overhaul.

The SEC described liquid staking as the practice of staking digital assets via protocols and receiving liquid staking receipt tokens in return. These tokens act as proof of ownership and are often used across decentralized finance (DeFi) platforms. While the SEC stressed the importance of context, it clearly said that “depending on the facts and circumstances, the liquid staking activities covered in the statement do not involve the offer and sale of securities.”

Liquid Staking Grows as Institutional Interest Rises

The SEC’s announcement comes at a time when liquid staking is booming, with $67 billion in total value locked (TVL) across protocols according to DeFiLlama. Ethereum dominates with over $51 billion TVL, while new players like Jito Labs, and ETF giants VanEck and Bitwise are pushing for Solana-based liquid staking ETF approvals.

This clarification could be a game-changer for ETF issuers, making it easier for them to pitch liquid staking funds to regulators and institutions. Until now, the industry has faced hurdles from an unclear regulatory landscape that blurred the line between staking rewards and investment contracts.

Project Crypto Ushers in Regulatory Reform

The update is the latest step in the SEC’s broader Project Crypto initiative, spearheaded by Paul Atkins. The program seeks to modernize U.S. regulations to match 21st-century digital finance realities, and it builds on recent recommendations from the White House’s Working Group on Digital Assets.

Since Atkins took office, the SEC has shifted sharply away from its enforcement-first approach under former Chair Gary Gensler. In May, the agency stated that staking on proof-of-stake (PoS) blockchains like Ethereum does not represent a securities transaction—a critical piece of clarity for validators, developers, and DeFi users alike.

Additionally, on July 29, the SEC approved in-kind creations and redemptions for Bitcoin and Ether ETFs, allowing authorized participants to swap ETF shares directly for crypto assets, rather than relying on fiat cash settlements. This change is expected to increase efficiency, liquidity, and institutional trust in crypto ETFs.

Policy Momentum Bolsters Crypto-Friendly Outlook

Alongside the SEC’s internal reforms, the U.S. policy environment is rapidly becoming more favorable to digital assets. The passage of the GENIUS Act — a landmark stablecoin regulation bill — and the House’s approval of market structure legislation and anti-CBDC measures have provided the industry with a more stable legal foundation.

With more regulatory clarity on staking, ETFs, and stablecoins, the U.S. appears to be pivoting toward a leadership role in global crypto policy. Atkins’ chairmanship signals a pro-innovation stance, one that supports compliance while nurturing the future of blockchain finance.