Liquid Staking Activities and Tokens Are Not Securities, Says SEC
Main Idea
The SEC's Division of Corporation Finance clarified that certain liquid staking tokens are not securities under the Howey test, which may facilitate the approval of staking in spot Ether ETFs.
Key Points
1. The SEC issued a statement defining staking tokens as 'receipts' for staked assets and stated that they are not securities under the Howey test.
2. Staking providers like Lido, which issues stETH tokens, were noted to act as agents facilitating staking rather than engaging in entrepreneurial or managerial efforts.
3. ETF expert Nate Geraci suggested that the SEC's clarification removes a key hurdle for approving staking in spot Ether ETFs, as liquid staking tokens can help manage liquidity.
4. BlackRock filed for a staked Ether ETF in July, which, if approved, could provide additional yields to investors and potentially impact ETH's price.
Description
The SEC’s Division of Corporation Finance issued a statement on Tuesday relating to liquid staking or ‘protocol staking.’ “It is the division’s view that liquid staking activities in connection with Protocol Staking do not involve the offer and sale of securities,” within the meaning of the Securities Act of 1933 and Securities Exchange Act of 1934, it stated. The statement continued to note that liquid staking participants “do not need to register with the Commission transactions under the Secu...
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