Furthermore, he noted that liquid staking tokens (LSTs) would be used to manage liquidity inside funds, a key concern for the Commission.
His comments echo the SEC Division of Corporation Finance’s view that, under the structures described, liquid staking activities do not involve offers or sales of securities.
Additionally, staking receipt tokens (SRT) function as receipts for the underlying assets rather than as securities themselves.
LSTs allow funds to keep staked exposure liquid, maintaining on-chain staking rewards while holding a transferable receipt token that can be used for portfolio operations, collateral, or redemptions without fully unwinding staking positions.
He added:
“We will see expanded use for LSTs in both traditional and novel financial instruments, including ETFs.”
Regarding the impact of the decision, Bruder is looking forward to fully-staked ETFs via LSTs coming to market.
According to the meeting logs, LSTs were discussed to address the agency’s concerns about redemption timing. The participants highlighted that LSTs within an ETP framework avoid direct involvement in the staking process, streamlining the process.
However, the SEC emphasized that its view applies to administrative and ministerial provider roles and specific fact patterns. Consequently, arrangements that go beyond those boundaries may be treated differently.
