The recent SEC statement on liquid staking has stirred debate among commissioners, becoming a topic of discussion within the cryptocurrency community. Commissioner Caroline Crenshaw expressed criticism of the statement, suggesting that it creates more confusion than clarity.
Criticism and Caroline Crenshaw's Opinion
SEC Commissioner Caroline Crenshaw sharply criticized a statement released by the agency's Division of Corporation Finance. She noted that the statement 'muddies the waters' by relying on unverified assumptions. 'Some things are better left unsaid,' she began her rebuttal.
SEC's Statement and Its Interpretation
According to the SEC, certain liquid staking activities do not constitute securities offerings, depending on how they are structured. SEC Chair Paul Atkins called the move a 'significant step forward' in outlining which crypto asset activities fall outside the agency's jurisdiction.
What is Liquid Staking?
Liquid staking allows crypto holders to earn rewards by staking their assets while using a tokenized version (liquid staking tokens) to trade, borrow, or otherwise participate in DeFi. It increases liquidity and flexibility in proof-of-stake networks, enabling broader access to staking benefits. Currently, nearly $67 billion is locked across various protocols in liquid staking, with approximately $51 billion in Ethereum.
The uncertainty in the regulation of liquid staking continues to spark debates within the crypto community. Comments from both Crenshaw and other commissioners highlight that the issues facing the crypto industry remain pertinent.
