- SEC explores liquid staking tokens for ETPs which could reshape asset liquidity in crypto investments.
- The meeting signals a shift from enforcement to industry collaboration in crypto regulation.
- Proposed staking models could set a precedent for integrating yield-generating assets into regulated ETPs.
The U.S. Securities and Exchange Commission held a meeting with Jito Labs and Multicoin Capital on February 5th, 2025. They met to explore ways of integrating staking functionality into exchange-traded products. The meeting was part of SEC’s continuous work to define specific guidelines for digital asset investment safeguards. Representatives from both firms presented their approaches to include staking while ensuring compliance and investor protection.
Two models for staking were discussed. The first model allows a portion of ETP assets to be staked through validators operated by service providers. This structure offers staking rewards while keeping assets liquid for redemptions.
The second model proposes using liquid staking tokens (LSTs), such as JitoSOL for Solana’s SOL. Under this approach, the ETP would hold only staked versions of the asset. This method maintains liquidity and provides staking rewards. Both models aim to balance investor returns, liquidity, and regulatory compliance.
SEC’s Evolving Position on Staking in ETPs
The meeting reflects the changing stance on cryptocurrency regulations in 2025. The agency formed the Crypto Task Force in January 2025 to increase dialogue with industry participants. Previously, the SEC required staking features to be removed from ETP applications. However, recent proposals, such as Cboe BZX’s application for staking in the 21Shares Core Ethereum ETF, signal a potential shift.
The discussion with Jito Labs and Multicoin Capital is part of this broader reconsideration. Analysts believe the regulatory body may now be open to models that align with regulatory standards while allowing staking within ETPs.
Potential Impact on the Crypto Market
The outcome of the discussions could impact future ETP applications. The SEC’s approval of staking activities in ETPs would create new potential return opportunities for investors. Future decisions about staking ETP products will be influenced by regulatory issues like security of assets and market liquidity.
Additionally, a policy shift could influence the broader cryptocurrency market. Approval of staking models within ETPs could drive further institutional investment and increase adoption of digital asset products. The SEC’s final position will likely shape the future landscape of crypto investment offerings in the U.S.
