Commissioner Caroline A. Crenshaw warns that the SEC’s statement offers little clarity for liquid staking providers.
US SEC Commissioner Caroline Crenshaw sharply criticized a staff statement released on Tuesday by the regulator’s Division of Corporation Finance that praised the SEC’s position on liquid staking activities, saying it created more confusion than clarity.
“Some things are better left unsaid,” began Crenshaw’s rebuttal, in which she argued that the staff statement “only muddies the waters” by relying on unverified assumptions.
Crenshaw said the statement creates a “wobbly wall of facts without an anchor in industry reality,” warning liquid staking entities to proceed cautiously: “Caveat liquid staker.”
The SEC Staff Statement says that certain liquid staking activities do not constitute securities offerings, depending on how they’re structured. Chair Paul Atkins called the move a “significant step forward” in outlining which crypto asset activities fall outside the agency’s jurisdiction.
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SEC commissioner Hester Peirce also issued a commentary after the agency’s statement, arguing that liquid staking is a familiar practice akin to depositing goods with an agent who issues receipts.
“Today’s statement clarifies the Division’s view that liquid staking activities in connection with protocol staking do not involve the offer and sale of securities,” Peirce wrote.
Liquid staking lets crypto holders 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 more efficient capital use and broader access to staking benefits.
Liquid staking has rapidly grown into a significant segment of the cryptocurrency market, with nearly $67 billion locked across various protocols, based on DefiLlama data.
Currently, Ethereum dominates this space, representing approximately $51 billion of the total. Leading platforms in liquid staking include Lido Finance, Rocket Pool and Ankr, which have driven much of this growth by enabling users to stake assets while maintaining liquidity.
