US Securities and Trade CommissionCorporation Finance’s division will release a staff statement on August 5, 2025 to tackle certain liquid staking activities and mark their important follow-up May 29, 2025 Protocol staking statement. Read the complete statement here.
The following opinion editorial was written by Alex Forehand and Michael Handelsman of Kelman.law.
What the statement covers
This statement extends protocol staking by clarifying the treatment of liquid staking in which depositors receive one-to-one staking receipt tokens (SRTs) in exchange for staking crypto assets covered by third-party service providers or protocol-based arrangements.
The staff will take the position that, if strict factual conditions are met, do not constitute an offer or sale of securities under section 2(a)(1) as defined by the staking activity of the liquid as defined. Securities Act Or Section 3(a)(10) Exchange method.
The key assumption is that providers will perform only the role of management or ministerials, not making discretionary staking decisions such as whether or not to guarantee yields, when, or how much yields. Howie.
How does this relate to the May statement?
This August statement was explicitly built on previous protocol staking statements discussed previously, addressing solo staking, custody staking, and delegated staking. To read the discussion of the SEC statement on Protocol stake, please refer here.
The new guidance confirms that a staking model of a particular liquid is within the same narrow sculpture when designed to reflect those same factual patterns.
What’s not covered
It’s covered:
- The SRTS was issued to depositors as a receipt for the dyeing token (not an investment agreement).
- Storage or protocol-based liquid staking staking where providers hold tokens, bet them, simply hold problems/redemptions, redemptions, redemptions, exercise discretion or provide guarantees.
Not covered:
- An arrangement in which providers exercise discretion as to when and to what extent interest they are.
- The model used to generate more SRTs is generated in agreement with the provider’s discretion.
- Ability to deviate from defined assumptions (e.g. reward guarantees, centralized selection of node operators).
If these assumptions are not strictly met, the safe harbor view of SEC staff no longer applies.
How SEC applies Howey in liquid staking context
Staff treat SRTs as receipts, just like warehouse receipts. This leads ownership of the pile to the securities rather than to the securities, as the underlying covered cryptocurrency is not security.
This test centers on whether there is an entrepreneurial or management effort for others to generate yields. According to the statement, liquid staking providers will act as agents rather than investment managers. Hold assets, issue/redeem tokens for each protocol, receipts, and receive fees, but do not direct decisions or guarantee returns.
Practical meaning and warning
Like the previous protocol staking statement, liquid staking guidance is non-binding and reflects only the views of Corp Fin staff only and is highly fact-specific with detailed assumptions that must be accurately satisfied.
As Commissioner Crenshaw warned, any deviation from any of these assumptions will undertake activities “outside the scope of this statement.”
Neither statement, 29th and 5th August – will provide a safe port for stable “staking”, reprocessing, or governance-based DAO staking models. They still require separate legal analysis.
summary
On May 29, 2025, SEC explained the narrow view of SEC staff. The staking model for a particular protocol is that it is not a security that is not a manager’s discretion. The August 5, 2025 statement extends that view into a defined class of liquid staking arrangements, but the provider performs a purely administrative role, with the SRTS acting as a receipt rather than an investment vehicle.
Neither statement covers Stablecoin yields, resumptions, or DAO staking, which are linked to governance or delegated decisions. Legal risk remains if a provider implements discretion, warranty, or additional services beyond a narrow management framework.
We regularly advise on token structure, staking protocol design, DAO governance model and cryptographic service services. We help our clients match the evolutionary SEC staff view, or conductivity Howie– Based risk assessment, drafting terms that meet regulatory thresholds, and preparing for potential SEC reviews.
inquiry here To discuss staking models, token issuance, or governance structures in light of these latest SEC statements.
This article was originally published on kelman.law.
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