SEC Greenlights Crypto Innovation: Liquid Staking Gets Regulatory Clarity

The SEC just handed crypto a rare win—liquid staking tokens now have a clearer path forward. No more guessing games for protocols looking to merge DeFi yields with tradable assets.

Wall Street's watchdog finally blinked. After years of playing whack-a-mole with crypto projects, the SEC's latest guidance effectively legitimizes liquid staking derivatives—as long as they're not masquerading as unregistered securities. (We know, good luck parsing that distinction.)

Market makers are already salivating. Expect a flood of new LST products hitting exchanges by Q4, each promising higher yields than the last. Because what could go wrong when you stack leverage on synthetic assets tracking volatile staking rewards?

One hedge fund manager quipped: 'Finally, regulators understand what we've known all along—that wrapping and rehypothecating crypto is totally safe. Said no one during the 2022 crash.'

The irony? This 'breakthrough' comes three years after Ethereum made staking mainstream. But hey, when the SEC moves, it does so at the speed of a blockchain confirmation—with about the same probability of reversal.

SEC and Cryptocurrencies

The latest announcement regarding specific liquid staking activities offers much-needed clarity for altcoins involved in this domain. While the SEC previously dealt with three staking models, today, it introduces liquid staking as the fourth, noteworthy addition to its considerations, distinguishing it from Protocol Staking.

Liquid staking tokens are distinct; they grant you new tokens indicating your deposit ownership. Platforms like Lido DAO facilitate this process, defining these tokens independently from the Protocol Staking Activity itself.

From the SEC’s perspective, liquid staking activities do not fall under the offering or sale of securities jurisdiction.

“Today’s personnel announcement on liquid staking is a significant step in clarifying the staff’s opinion regarding crypto asset activities outside the SEC’s jurisdiction.” – SEC Chairman

Among the leading altcoins in this field is LDO, which experienced a 1.4% increase. Likewise, JTO and RPL have shown upward trends. This announcement by the SEC, indicating no pressure WOULD be on liquid staking, could effectively trigger further gains for these involved altcoins.

Trump and Russia

As this article was prepared, the Financial Times (FT) released a significant new announcement. Reports from insider sources suggest a substantial increase in Russia-related news within the past hour, implying possible future escalations between Russia and the USA, potentially impacting oil prices even under the most optimistic scenarios.

According to FT sources, if Russia’s President Vladimir Putin doesn’t agree to a ceasefire by Friday, TRUMP is prepared to impose new sanctions on Russia’s shadow fleet, which concerns the tankers through which Russia exports oil. Blacklisting this fleet would pose a formidable challenge for Russia, marking a first of its kind sanction from Trump’s administration against Putin post-re-election.

These sanctions are not limited here. Trump also mentioned potentially imposing taxes exceeding 100% on countries importing oil from Russia to hinder its oil sales further.