The U.S. Securities and Exchange Commission (SEC) has clarified that certain liquid staking practices may not constitute securities offerings. This move suggests a significant shift in regulatory approach under current Chairman Paul Atkins.
The clarification holds potential to alleviate regulatory burdens on the crypto industry, particularly within the rapidly growing liquid staking sector. Reports indicate liquid staking protocols hold a collective Total Value Locked (TVL) of $67 billion, with Ethereum alone accounting for approximately $51 billion.
Observers note this development aligns with the SEC’s broader pivot away from a ‘regulation by enforcement’ strategy toward a more crypto-friendly posture since Atkins assumed leadership. Key indicators of this shift include the approval of in-kind creation and redemption models for Bitcoin and Ether exchange-traded funds (ETFs).
The SEC’s explicit stance on liquid staking is expected to enhance liquidity for participants and foster growth within the staking market for Ethereum and other proof-of-stake protocols. This regulatory direction further coincides with ongoing legislative reforms, such as proposed GENIUS Act bills impacting crypto custody and stablecoin legislation, collectively signaling a potential easing of regulatory pressures facing the digital asset industry.