SEC's guidance on liquid staking is sparking disputes due to its ambiguity and potential impacts on the cryptocurrency market, especially Ethereum.
Critique of SEC Guidelines
On August 5, 2025, the SEC issued guidance regarding liquid staking, which was criticized by Commissioner Caroline Crenshaw. She noted that the guidance could potentially mislead market participants in the crypto space. Crenshaw stated, 'Given its unsupported factual assumptions and circumscribed legal analysis, the Liquid Staking Statement should provide little comfort to entities engaged in liquid staking.' Meanwhile, Chairman Paul S. Atkins supported the Division's efforts.
Market Impact and Ethereum
The guidance may adversely affect protocols related to liquid staking, particularly Ethereum, which plays a central role in DeFi ecosystems. Liquid staking enables market participants to receive tokens that provide market liquidity, yet uncertainty looms over the market due to the absence of specific reactions from key Ethereum developers.
Regulatory Landscape and Its Consequences
The SEC's ongoing attempts to delineate cryptocurrency regulation continue to face scrutiny. Market participants may face legal challenges or adapt in response to perceived regulatory uncertainties. Historically, the SEC has already taken enforcement actions against staking services. The current guidance contributes to this pattern of uncertainty and caution among market actors.
The SEC's liquid staking guidance generates substantial uncertainty within the cryptocurrency market and is actively discussed among participants, potentially leading to significant changes in the future.
