SEC Affirms Position on Liquidity Pool Management Operations
In a significant development on August 5-6, 2025, the U.S. Securities and Exchange Commission (SEC) Division of Corporation Finance officially stated that liquid staking activities and the associated staking receipt tokens are not considered securities under federal securities law, as long as the underlying crypto assets themselves are not part of an investment contract.
This guidance, while not formal rulemaking, strongly signals the SEC’s regulatory stance, reducing enforcement risk for liquid staking providers and participants. It applies so long as the arrangement is administrative and ministerial rather than extending into investment contract territory. Major protocols like Lido (LDO), Rocket Pool (RPL), and Jito (JTO) have been cited in this context.
The SEC's position aligns with the Howey test framework for defining securities and supports continued innovation and institutional participation in liquid staking within DeFi ecosystems. This confirmation officially marks a major step in SEC framing of crypto asset regulatory boundaries as of August 2025.
| Aspect | SEC Clarification (August 2025) | |------------------------------|-------------------------------------------------------------------| | Liquid staking tokens | Not securities if underlying assets are not investment contracts | | Regulatory requirement | No SEC registration or disclosures needed for participants | | Basis for decision | Tokens represent ownership and rewards with no entrepreneurial efforts | | Effect on market | Reduces enforcement risk, encourages innovation and institutional adoption | | Binding legal effect | Not binding law but a clear regulatory signal |
Elsewhere in the crypto sphere, Ethereum, the second-largest cryptocurrency by market cap, experienced a 99.46% price surge over a 90-day period, with its last known trading price at $3,602.15. The market cap neared 434,814,195,065.89, and a trading volume increase of 33,122,280,000.24 was recently recorded.
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[1] SEC Press Release, "Division of Corporation Finance Provides Guidance on Liquid Staking Tokens" (August 5, 2025). [2] Federal Register, "Guidance on Liquid Staking Tokens" (August 6, 2025). [3] SEC FAQs, "Liquid Staking Tokens" (August 6, 2025). [4] Coincu Research, "Regulation Rescue in the Crypto Space: Focus on Exchange-Traded Products Over Liquidity Mining" (August 10, 2025). [5] Howey Test, "Framework for Defining Securities" (1946).
- The SEC's new guidance on liquid staking tokens, issued on August 5-6, 2025,declares that these tokens are not classified as securities under federal securities law, as long as the underlying cryptocurrency assets are not part of an investment contract.
- With the SEC's clarification in August 2025, investing in liquid staking activities within DeFi ecosystems may see increased adoption, thanks to the reduced enforcement risk and support for continued innovation, especially for major protocols like Lido (LDO), Rocket Pool (RPL), and Jito (JTO).
