On August 5, 2025, the SEC’s Division of Corporation Finance (the “Division”) issued another statement on crypto assets to provide greater clarity on the regulation of crypto assets. This statement affirms that certain “liquid staking” practices do not constitute securities if executed as set forth in the statement.
In general terms, crypto staking is the practice of locking a holder’s crypto assets into a blockchain network in order to earn rewards. The Division’s statement focuses on “liquid staking,” which allows holders of crypto assets to stake through protocol-based or third-party service providers, with the holders receiving newly minted (or created) assets called “Staking Receipt Tokens” that evidence the holder’s ownership. In addition to functioning as claim checks for the staked assets, Staking Receipt Tokens also have other use cases, including as collateral or to participate in crypto applications.
In the Division’s view, the “liquid staking” activities described do not constitute the offer or sale of securities under the Securities Act or the Exchange Act. Further, “Staking Receipt Tokens” themselves are not securities; rather, they are receipts for deposited assets. In making these statements, the Division relied on SEC v. W.J. Howey Co., 328 U.S. 293 (1946). The Howey test describes when a transaction qualifies as an “investment contract,” in which case it may be subject to the securities laws. The Division expressed the view that because “liquid staking” providers engage in administrative or ministerial services but do not exercise managerial discretion, they would fail a key element of the Howey test.
Although this is a staff statement by the Division, and not binding SEC policy or law, it reflects the current internal views of the SEC staff. By providing more clarity, this may ultimately pave the way for additional liquid staking strategies by institutions, further progressing the overall market for crypto assets.
