The latest comments of the US Securities and Exchange Commission on Liquid staking have led to a mix of optimism and concern, featuring the regulation of gray area surrounding one of the fastest growing crypto sectors.
While some in the industry see non -binding guidance As a step forward For institutional and retail adoption, others warn that it has left basic legal questions that have not been resolved and may face the challenges on the line.
“First, these guidelines are not law … and they can argue at some point,” Scott Gralnick, head of institutional staking in marinade, said in cointelegraph.
“The industry needs to continue to work together to produce positive outcomes of the regulation. This includes promoting for the law of the market structure to vote as soon as possible.”
https://www.youtube.com/watch?v=TQGSMSUTQ8g
The key to the SEC statement is a refusal that represents the views of a division within the agency, not the overall position of the agency. The refusal note that the statement is “not a rule, regulation, guide, or statement” of the Sec.
A resource familiar to the process is told to the cointelegraph that the staff guide is not abnormal and has no formal vote from the commission. That does not mean that commissioners do not know the guidance, however.
Related: What is liquid staking, and how does it work?
More complex products
Liquid staking, which gives users to earn rewards while maintaining their liquid and available tokens, is more complicated than traditional staking. Even with liquid staking protocols, technical and operational models can vary. The recent SEC staff guide may not be fully account for differences.
“This guidance proves that liquid staking activities are not considered security offerings,” said Lido Labs Chief Legal Officer Sam Kim. “That said, there are still some open regulatory questions around related areas such as restoration, crosschain staking, and more complex financial products developed at the top of staking. These areas will still require further regulation clarification.”
https://www.youtube.com/watch?v=Gu3jr-dtke
According to Sol Strategies Chief Strategy Officer Michael Hubbard, protocols whose operations are concentrated administrative or ministerial issues of receipt tokens on a one-for-one basis, allowing users to control the timing or value and prevent guaranteed return- “may find regularity clarity under this outline.”
“However, the guide is quite specific to its parameters and emphasizes that any deviation from the described structure may result in various regulatory treatments,” Hubbard told the cointelegraph.
Related: The tokens of liquid restoring compared to liquid staking tokens
Taxing issues
One of the important issues left by the Sec Division’s statement was the taxation of rewards obtained by liquid staking. Rewards will affect the participants of the ecosystem, including stakers, small and large, reporting to tax agencies.
“Some questions go on about the timing of taxing staking rewards (whether in acceptance or disposition),” operating officer’s chief Operating Officer Evan Weiss said.
“This issue is currently under legal analysis of active cases, and has significantly continuous advocacy at the Congress level seeking fair tax treatment to support the continued development of the industry.
Another major issue is Grantor’s confidence tax rules, which manages how the property is taxed when transferred after death. According to Weiss, these policies are the “main regulation obstruction that prevents staking integration within funds exchanged by the exchange” and remains “unresolved matter.”
Magazine: Ethereum restaking – blockchain innovation or dangerous houses of cards?
