tl;dr
The SEC issued an exemptive statement formally allowing liquid staking providers to issue staking tokens and pay rewards without securities registration, recognizing platforms like Ethereum’s Lido and Solana’s Jito as outside its jurisdiction. Liquid staking lets users deposit crypto and receive tra...
The SEC issued a crypto-focused exemptive statement officially endorsing the activities of liquid staking providers, allowing them to issue staking tokens and pay financial rewards to users. This follows a prior statement exempting various staking forms from securities regulation. Leading DeFi players, including Ethereum’s Lido and Solana’s Jito, are now recognized as operating outside the SEC’s jurisdiction.
Liquid staking platforms enable users to deposit cryptocurrency and receive staking tokens that retain liquidity and value. For example, Lido issues stETH for ETH deposits, while Jito provides JitoSOL for SOL depositors. These tokens allow users to trade across DeFi protocols while their underlying assets earn staking rewards, supporting decentralized finance’s core mission of peer-to-peer transactions without intermediaries.
Lido has amassed over $31 billion worth of ETH, making it the dominant ETH staker and a central player in DeFi. The SEC’s statement clarifies that liquid staking activities, including issuing staking tokens and distributing rewards, do not constitute securities offerings and therefore do not require registration with the agency. This guidance reinforces the SEC’s nuanced understanding of crypto technology, as highlighted by industry leaders like Jito Labs CEO Lucas Bruder.
The exemption marks another in a series of regulatory clarifications under the current U.S. administration, which has progressively carved out sectors such as crypto mining, meme coin trading, and stablecoins from SEC oversight. This shift contrasts with earlier regulatory crackdowns on custodial staking providers, while liquid staking entities have remained free from lawsuits. Overall, the SEC’s evolving stance reflects growing acceptance and regulation tailored to the unique structures within the crypto ecosystem.