5

August

2025

SEC updates staking guidance with clarification on liquid staking arrangements

On August 5, 2025, the SEC’s Division of Corporation Finance issued a staff statement identifying specific liquid staking arrangements, including the issuance and secondary trading of staking receipt tokens, as activities that do not involve the offer or sale of securities when the provider performs only administrative or ministerial functions. The statement explains that receipt tokens involved in liquid staking are used to evidence ownership of staked assets and related rewards, whereby users can redeem their underlying tokens on demand. The statement clarifies that such arrangements do not satisfy the “efforts of others” prong of Howey (the judge-made test for determining whether an instrument is an “investment contract” for purposes of federal securities laws) unless the liquid staking provider or another party uses the deposited assets within an investment contract. Although the statement does not bind market participants, it does reflect the SEC’s enforcement position under current Chair Paul Atkins.

The Division’s statement followed an earlier staff statement (from May 29 of the same year) in which the Division took the position that several forms of Proof of Stake (PoS) protocol staking, including self-staking, self-custodial staking using third parties, and custodial staking, fall outside the definition of a securities offering when the provider performs only clerical, technical, or ministerial actions. Read together, the two statements demonstrate a significant shift from the SEC’s earlier enforcement posture under former Chair Gary Gensler and diverge from certain federal district court decisions, including in the Binance and Coinbase cases, that treated some staking arrangements as securities offerings.

Last updated 08/05/2025.


United States (Regulatory)

History:

  • Aug 5, 2025: The SEC Division of Corporation Finance publishes a non-binding staff statement on liquid staking, identifying certain liquid staking arrangements and the issuance and secondary trading of staking receipt tokens as activities that do not involve the offer or sale of securities when providers perform only administrative or ministerial functions. Statement.
  • May 29, 2025: The SEC Division of Corporation Finance releases a non-binding staff statement reversing the Commission’s prior position on what it calls “protocol staking” of digital assets, indicating the suggesting the agency will now generally interpret such activities as not involving the offer or sale of any security. Statement.
  • Feb 21, 2025: SEC Commissioner Hester Peirce releases a statement containing a Request for Information (RFI) from the SEC Cryptocurrency Task Force, seeking public input on 48 questions related to the regulation of digital assets, including several questions that are specifically focused on staking. Statement.
Read the SEC's statement
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Amil Malik

Amil assists with various client matters in connection with digital assets and the adoption of blockchain technology, including general corporate law, securities law, and financial services regulation. She joined DLx Law after receiving her J.D. from the George Washington University School of Law, where much of her studies focused on national security and cybersecurity law.

Amil received her B.B.A./B.A. with high honors from the University of Texas at Austin. Between university and law school, Amil worked as a mergers and acquisitions analyst in New York, where she performed financial valuations and analysis as part of advisory services provided to sell-side and buy-side clients across media, consumer, technology, shipping, and financial technology industries. Amil is licensed to practice law in the District of Columbia.

Tom Momberg

+17186645458 tom.momberg@dlxlaw.com

Tom advises clients in an array of matters related to blockchain technology, decentralized finance, banking and payments systems, financial products, and financial technology applications. He joined DLx Law as an attorney after working as in-house counsel for a payments and banking software service provider, advising on various legal and regulatory matters, operations, risk, customer due diligence, and corporate best practices.

Tom received his J.D. from George Mason University Law School in Virginia and his B.A. from the University of Wisconsin-Milwaukee. Tom is a former journalist, and, while in law school, he interned for DLx Law and served as a law clerk for several federal institutions in Washington, D.C., including the CFTC, FCC, and House Judiciary Committee. Tom is admitted to practice law in the District of Columbia and the State of Oregon.

Sarah Chen

+19296345691 sarah.chen@dlxlaw.com

Sarah advises clients in all matters related to the adoption of blockchain technology, including general corporate, venture financing, securities laws and financial regulatory. Prior to joining DLx Law, Sarah was a senior associate in the M&A group of an international law firm headquartered in New York City, advising public companies and private equity firms on mergers, acquisitions, and other corporate transactions.

Sarah received her B.A. from New York University, magna cum laude, and her J.D. from Columbia Law School where she was a James Kent Scholar. During law school, Sarah also served as a judicial extern to the Hon. Debra Ann Livingston of the U.S. Court of Appeals for the Second Circuit. Sarah is licensed to practice law in the State of New York.

Gregory Strong

+3027665535 greg.strong@dlxlaw.com

Greg focuses on advising entities regarding legal issues associated with the adoption of blockchain technology. Prior to joining DLx Law, Greg was a Deputy Attorney General in the Delaware Department of Justice. He served as the Director of the Investor Protection Unit for three years and was responsible for administering and enforcing the provisions of the Delaware Securities Act. Prior to his appointment as Director of the Investor Protection Unit, Greg was the Director of the Consumer Protection Unit for three years.

Greg has successfully represented the State of Delaware in many complex civil enforcement matters alleging violations of Delaware investor and consumer protection statutes and has extensive litigation experience. Greg graduated from Lehigh University with a B.S. in Finance and received his J.D./M.B.A. from Temple University.

Angela Angelovska-Wilson

+12023651448 angela@dlxlaw.com

Angela is an early distributed ledger technology adopter and a leading authority in the evolving global legal and regulatory landscape surrounding distributed ledger technology and smart contracts. Prior to co-founding DLx Law, Angela served as the Chief Legal & Compliance Officer of Digital Asset and was part of the founding team.

Prior to joining Digital Asset, Angela was a partner at Reed Smith where she regularly advised clients on the implementation of new technologies to finance and the complex regulatory schemes involved in the development, creation, marketing, sale and servicing of various financial services and products. Before Reed Smith, Angela spent most of her career in various roles at Latham & Watkins, where she was recognized by The Legal 500 US among the top finance attorneys in the U.S.

Angela has a deep understanding of the Fin-Tech industry and in particular the distributed ledger industry, having been involved in a number of startups in various roles, as an employee, entrepreneur and advisor. In addition to DLx Law, Angela is also co-founder of Sila Inc., an innovative technology company.