According to a recent statement from the US Securities and Exchange Commission, participants in liquid staking, including both depositors and providers, are not required to comply with securities law disclosures. The statement, released by the Division of Corporation Finance, specifically focuses on liquid staking, a process where individuals deposit certain crypto assets into a third-party staking protocol provider, which then issues receipt tokens to the depositors. This practice enables users to lock up tokens in proof-of-stake blockchains while maintaining access to their funds through derivative tokens, which can be utilized for various DeFi activities. Currently, the total value locked in liquid staking across all blockchains is approximately $67 billion, with $31.7 billion in Lido, based on data from DefiLlama.
Following the SEC statement, tokens associated with several liquid staking protocols, including Lido, Jito, and Rocket Pool, experienced a marginal increase but remain down in daily trading, as per CoinGecko. It is essential to note that the SEC had previously published a staff statement addressing other forms of staking, and similar to the previous statement, the recent note on liquid staking is not considered binding guidance from the Commissioners or regulations that have undergone the SEC's formal rulemaking process. However, the new statement provides insight into the agency's perspective on the issue and implies that crypto industry participants who adhere to the guidance will not face regulatory action.
The statement specifically outlines the roles of liquid staking providers, including their involvement in earning and distributing rewards, slashing, and the minting, issuing, and redeeming of Staking Receipt Tokens, as well as other ancillary services, with the condition that the deposited crypto assets cannot be part of or subject to an investment contract. The statement emphasizes that in a liquid staking arrangement, the provider does not offer entrepreneurial or managerial efforts to depositors and acts solely as an agent for staking the deposited crypto assets on behalf of the depositor.