The U.S. Securities and Exchange Commission (SEC) has made an important announcement regarding liquid staking cryptocurrency operations, clarifying that not all of them qualify as securities offerings.
Definition of Liquid Staking
The SEC characterizes liquid staking as a process where users stake digital assets via a protocol and receive tokens that act as proof of ownership for the staked assets. These tokens allow for more flexible use of the staked assets.
Regulating Cryptocurrencies under Paul Atkins
This announcement aligns with the SEC’s Project Crypto initiative, which aims to update the regulatory framework for cryptocurrency trading in the U.S. Under Paul Atkins, the SEC has adopted a more lenient policy toward digital assets, including recent clarifications that proof-of-stake protocols should not be considered securities transactions.
Growing Interest in Liquid Staking
As interest in liquid staking increases, the total value locked is approaching $67 billion, according to DefiLlama. Ethereum holds a prominent share with $51 billion of this total.
The SEC's new guidance creates clearer frameworks for the cryptocurrency market, particularly regarding liquid staking, offering hope for further legalization and development of digital assets.
