New guidance from the U.S. Securities and Exchange Commission (SEC) regarding liquid staking protocols has ignited a debate among commissioners and industry observers. The agency’s stance has drawn internal criticism and external comparison to the 2008 financial crisis, while finding support from another commissioner.
SEC Commissioner Caroline Crenshaw publicly criticized the agency’s guidance, arguing it lacked adequate clarity. This internal dissent highlights differing viewpoints within the regulator on how liquid staking should be approached. Furthermore, former agency official Amanda Fischer generated significant controversy by comparing aspects of liquid staking to factors that worsened the 2008 financial crisis, drawing backlash from segments of the cryptocurrency community.
In contrast, SEC Commissioner Hester M. Peirce voiced support for the agency’s position. Commissioner Peirce likened liquid staking to mechanisms that improve liquidity for fungible goods, providing a different perspective on its function within the crypto ecosystem.
The backdrop to this regulatory discussion is a substantial market. Liquid staking protocols collectively hold a Total Value Locked (TVL) exceeding $66.94 billion. Lido Finance dominates this sector with a TVL of roughly $31.88 billion, commanding nearly half the market share. Binance Staked ETH, the sector’s second-largest player, experienced a significant surge in its TVL, rising almost 90% to reach $11.4 billion.