On August 5 2025, the Securities and Exchange Commissions of the United States (SEC) released a breakthrough in the staff statements that signified a milestone in the introduction of regulation on crypto. The agency, for the first time confirmed that certains staking receipts tokens (also securities referred to as liquid staking tokens (LSTs)) are not securities so long as they satisfy the conditions.
This will portend a more permissive regulatory foot with decentralized-financed (DeFi) and it might reconfigure the way institutional and retails investors interact with staking protocols on chains like Ethereum, Solana or others
What Is Liquid Staking—and Why It Matters
The process of liquid staking enables owners of cryptocurrencies (such as ETH or SOL) to keep their tokens in circulation whilst simultaneously staking them. When stake with a given project (e.g., Lido or Jito Labs), the user gets a token (e.g., stETH, rETH, or JitoSOL) that can be thought of as the user staked assets and rewards that the account receives.
Such staking-receipt tokens are very important to DeFi in that they allow users to get staking rewards, as well as move their assets as collateral, liquidity or yield-generating assets across the DeFi protocols.
SEC, to date, has not clarified the nature of these tokens} making it hard to state whether the developers, users or investors can rest easy.
What the SEC Said in Its August 5, 2025 Staff Statement
In its newly released staff guidance, the SEC’s Division of Corporation Finance stated that liquid staking activities and the issuance of staking receipt tokens do not constitute an offer of securities under federal law—but only if certain conditions are met and Crypto Securities Laws.
These include:
- The tokens are not sold with profit guarantees or promotional efforts.
- The staking platforms don’t exercise discretionary authority over user funds.
- Providers function in administrative-only roles—not as active investment managers.
SEC Chairman Paul Atkins praised the statement as a “significant step forward in regulatory clarity that supports innovation and investor protection alike.”
Which Protocols Are Covered by the Exemption
Several major protocols have been named or inferred as operating within the SEC’s newly defined safe zone. These include:
- Lido Finance (Ethereum)
- Rocket Pool (Ethereum)
- StakeWise
- Jito Labs (Solana)
- Marinade Finance (Solana)
This ruling follows prior SEC actions in early 2025, where the Commission narrowed its enforcement lens and dropped its lawsuits against Coinbase and Kraken, reopening the door for staking services under more flexible conditions.
Why It Matters for the Crypto Industry
The decision offers a clear path forward for liquid staking—a sector that accounts for more than $67 billion in total value locked (TVL) across blockchains and Crypto Securities Laws.
Here’s why the exemption is a big deal:
- Investors can use LSTs without worrying about violating securities laws.
- Protocols can offer staking services more confidently, encouraging growth.
- ETF issuers and institutions may now explore staking-inclusive products.
This also represents a regulatory victory for DeFi developers, many of whom have argued for years that staking is fundamentally different from securities investing.
Key Caveats & Limitations
While the SEC’s statement is promising, it comes with caveats:
- The guidance is non-binding, meaning it reflects the staff’s view rather than enforceable law.
- The exemption only applies if projects meet all outlined conditions—including strict limitations on how they operate and communicate with users.
- Commissioner Caroline Crenshaw issued a public dissent, warning that in practice, many liquid staking providers may still fall outside the scope of this exemption.
Broader Regulatory Context: Project Crypto
This shift is part of a broader initiatived called Projects Crypto, announced by the SEC in July 2025. The programs seeks to modernized how the agency regulates digitals assets, with a focused on collaborations over enforcements.
Key developments include:
- Dropping lawsuits against Coinbase and other exchanges.
- Reapproving staking services under new voluntary compliance models.
- Launching a sandbox program for DeFi innovation.
Project Crypto signals that U.S. regulators are finally recognizing the global competitiveness of crypto finance—and that heavy-handed enforcement is giving way to measured guidance and Crypto Securities Laws.
Implications for Investors and Projects
For crypto holders, this means:
- Greater access to DeFi opportunities using staking tokens.
- Less regulatory risk when using LSTs in smart contracts, lending, or liquidity pools and Crypto Securities Laws.
For developers and projects:
- A clear framework for designing staking mechanisms that don’t trigger securities laws.
- New doors opening for partnerships with financial institutions, exchanges, and asset managers.
What to Watch Going Forward
This isn’t the end of the story. Here’s what to keep an eye on:
- Formal rulemaking: Will the SEC codify this guidance into law?
- New leadership changes after 2025 elections could shift the tone again.
- Congressional efforts to pass the CLARITY Act or related legislation could further bolster DeFi rights.
- Global coordination: Other regulators (EU, Singapore, UAE) may follow suit with similar exemptions.
Conclusion
August 2025 statement of SEC about staking of tokens changes the course of crypto regulation in the U.S. The agency has helped to clear one of the fastest developing aspects of DeFi by stating that some liquid staking tokens are not securities.
The policy change is not simply a legal milestone, it is a legal go-ahead to builders, investors and institutions to act with confidence in the staking economy.
And continue checking inthenearfuture.com to get more on-the-ground coverage as the relationship between crypto and regulation continues to develop.