A recent statement from a division within the US Securities and Exchange Commission (SEC) has sparked disagreement among its top officials, with Commissioner Caroline Crenshaw pushing back against it.
The statement, released by the Division of Corporation Finance on August 5, suggested that some forms of liquid staking might not fall under US securities laws, depending on how they are set up.
SEC Chair Paul Atkins stated that the update helped make clear which crypto activities are outside the agency’s reach.
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However, Commissioner Crenshaw argued, “Some things are better left unsaid”. She said the statement relies on guesses that have not been tested and may give people the wrong idea.
Crenshaw added that the memo builds a “wobbly wall of facts” and does not match how the industry actually works. She ended her note with a warning to those offering liquid staking services, “Caveat liquid staker”.
Commissioner Hester Peirce took a different view. In her follow-up note, she compared liquid staking to storing goods and getting a receipt in return. Peirce stated that using tokens tied to staked crypto does not automatically mean a security is being offered.
Liquid staking is a method where users lock their crypto in a network to earn rewards. At the same time, they receive a token that shows they still own the original assets. This token can then be used in trading or other decentralized finance (DeFi) activities.
Recently, Commissioner Peirce called for stronger protection of people’s right to make private transactions. What did she say? Read the full story.
