Former SEC Chief of Staff Amanda Fischer has sparked backlash from the crypto community after likening liquid staking to practices that fueled the 2008 global financial crisis.
The controversy follows a Tuesday statement from the SEC clarifying that certain liquid staking activities are not considered securities offerings and therefore fall outside the agency’s regulatory scope.
Taking to X, Fischer drew parallels between liquid staking and Lehman Brothers’ use of client assets as collateral—one of the risky strategies that contributed to the firm’s collapse during the 2008 crisis.
“The SEC’s latest crypto giveaway is to bless the same type of rehypothecation that cratered Lehman Brothers—only in crypto, it’s worse because you can do it without any SEC or Fed oversight,” Fischer wrote.
SEC Commissioner Caroline Crenshaw also voiced her opposition to the decision on Tuesday, arguing that the agency’s statement is based on assumptions and offers minimal regulatory clarity.
In contrast, SEC Commissioner Hester M. Peirce backed the move, describing liquid staking as “a new solution to an old problem.” In her official statement, Peirce likened liquid staking to a method that enhances the liquidity of fungible goods.
Fischer’s comment sparks backlash
Fischer’s remarks drew strong pushback from the crypto community, which largely viewed the SEC’s new guidance as a positive step for decentralized finance and broader institutional adoption of crypto.
VanEck’s head of digital assets research, Matthew Sigel, responded on X: “First you say the SEC is blessing crypto. Then you say crypto has no SEC oversight. Which is it? You’re contradicting yourself mid-rant.”
Fischer replied, clarifying that the SEC is effectively “blessing” liquid staking by declaring it outside the scope of securities regulation, and therefore beyond the agency’s jurisdiction.
Others in the crypto space were similarly critical. Mert Mumtaz, CEO of Helius Labs, pointed to the transparent and decentralized nature of blockchain technology in contrast to the opacity of traditional banking.
“You either have no idea how LSTs actually work or are being intentionally obtuse,” Mumtaz said.
Jason Gottlieb, a New York-based attorney, also weighed in, saying Fischer’s comparison was neither “technically nor legally” accurate.
“If blockchain-based rehypothecation existed in 2008, we likely wouldn’t have seen the same problems,” Gottlieb added.
Resurgence in TVL
Liquid staking protocols currently hold a total value locked (TVL) of $66.94 billion across all platforms, reflecting a 14.5% increase since the start of the year. However, the TVL saw a sharp dip in April, briefly falling below $30 billion, according to DefiLlama.
Lido Finance continues to lead the sector, commanding nearly 48% of the market with a TVL of $31.88 billion—though that figure marks a 1.5% decline year-to-date.
In contrast, Binance’s staked ETH service, the second-largest in the space, has experienced rapid growth. Its TVL has nearly doubled, jumping from $6.05 billion at the beginning of the year to $11.4 billion.
