TL;DR

SEC confirms that tokens under liquid staking arrangements do not qualify as securities, giving protocols like Lido a legal green light to run their staking services without fear of enforcement actions.
With more than $24 billion in total value locked, Lido can now expand its services in the United States and welcome participation from banks, exchanges, and asset managers.
Analysts predict this ruling will inspire innovation among liquid staking providers as they adjust token and governance structures to meet robust regulatory standards and drive broader network participation.

Lido Finance is celebrating a landmark determination by the U.S. SEC clarifying that its staked Ether token stETH is not a security. This guidance brings much-needed regulatory certainty to the liquid staking market and removes a significant barrier to institutional adoption. With more than $24 billion in total value locked, Lido can now expand its services in the United States and welcome participation from banks, exchanges, and asset managers.

A Big Day for Ethereum: SEC Clarity on Liquid Staking

Yesterday’s SEC guidance confirming that liquid staking and receipt tokens like stETH do not constitute securities provides the much needed guidance that Lido and the industry have needed. As the leading liquid staking… https://t.co/H2WN1BWKSF

— Lido (@LidoFinance) August 6, 2025

Background on Liquid Staking

Liquid staking allows users to earn rewards by delegating Ether to validator nodes while retaining token liquidity. Lido issues stETH as a representative token that accrues staking yields and can be traded across DeFi platforms. This model has attracted a user base seeking yield without locking funds and helped Lido secure over $24 billion in total value locked on Ethereum.

SEC Clarifies Non-Security Status

The U.S. SEC issued guidance confirming that tokens issued under liquid staking arrangements do not qualify as securities under federal law when structured without centralized profit promises. This clarification addressed concerns that stETH might face unregistered securities rules. By removing uncertainty, the SEC has given protocols like Lido a legal green light to run their staking services without fear of enforcement actions.

Market and Institutional Reactions

Lido DAO and its community celebrated the decision as a victory for decentralization and a confirmation of their governance model. Multiple major exchanges revealed intentions to list or enhance support for stETH trading without any regulatory concerns, and institutional custodians showed interest in providing liquid staking services to their clients. Observers say this development could unlock billions in new capital for Ethereum staking by removing legal obstacles that previously deterred banks and asset managers.

A Roadmap for DeFi Growth

Analysts predict this ruling will inspire innovation among liquid staking providers as they adjust token and governance structures to meet robust regulatory standards. Competing platforms may rework their fee models and decentralization features to follow Lido’s example, credited by the SEC as key to its non-security status.

Beyond Ethereum, this precedent could shape liquid staking on other proof-of-stake blockchains and fuel the growth of interoperable DeFi applications that utilize stETH liquidity and drive broader network participation.

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Filed under: News - @ August 6, 2025 1:31 pm