On 5 August 2025, United States Securities and Exchange Commission (US SEC) Commissioner Caroline A. Crenshaw issued a response to the US SEC Division of Corporation Finance’s staff statement on liquid staking. While the Division had sought to provide “greater clarity on the application of the federal securities laws to crypto assets,” Crenshaw argued that the statement instead “muddies the waters.” Her dissent, titled “Response to Staff Statement on Certain Liquid Staking Activities: Caveat Liquid Staker”, raised concerns that the Division’s conclusions rest on “a wobbly wall of factual assumptions” disconnected from industry reality. Crenshaw emphasised that the statement represents only staff views, not binding Commission guidance, and therefore provides little comfort to liquid staking entities.
Crenshaw’s Critique of the Staff Statement
Commissioner Crenshaw argued that the Division’s Statement on Certain Liquid Staking Activities builds broad legal conclusions on unsupported factual assumptions. She warned that the statement’s framing does not reflect how liquid staking actually operates in practice.
Crenshaw stated “But instead of clarifying the legal landscape, today’s statement, like other recent staff statements before it, only muddies the waters” which means that while the Division defines the scope of liquid staking narrowly, its conclusions apply only if every assumption about how providers operate proves correct. Any deviation in real-world models would place activities outside the statement’s coverage.
She further stressed that the statement explicitly disclaims Commission endorsement and cautions that its analysis may change depending on facts. This conditional framing, she argued, undermines the regulatory certainty the industry seeks.
Caveat for Liquid Staking Providers
According to Crenshaw, liquid staking entities should not rely on the staff statement as a safe harbour. Because the analysis is “circumscribed by assumptions,” providers whose business models differ in any material respect remain exposed to regulatory risk. Her conclusion was clear: “Caveat liquid staker.”
This follows her earlier critique of the Division’s May 2025 Protocol Staking Statement, where she warned that vague generalisations could not be “mapped onto real-world services.”
Legal Context and Implications
The Division’s staff statement made it clear that liquid staking activities, conducted within described parameters, do not involve the offer or sale of securities under Section 2(a)(1) of the United States Securities Act of 1933 or Section 3(a)(10) of the United States Securities Exchange Act of 1934. Her response as Dissent to the statement is in contradiction to the statement issued by the Division of Corporate finance and signals towards an enduring divide within the US SEC over how staking arrangements should be classified under federal securities laws.
(Source: https://www.sec.gov/newsroom/speeches-statements/crenshaw-statement-liquid-staking-080525)
