Ethereum Transaction Volumes Hit Yearly High Amid SEC Liquid Staking Guidance

Transactions on the Ethereum network have reached a one-year high as the US Securities and Exchange Commission (SEC) issues new guidance on staking. This surge coincides with historic highs in Ether staked on the network, with over 36 million Ether now staked, representing nearly 30% of the total token supply according to Dune Analytics. A large number of tokens locked into smart contracts indicates that Ether holders are opting to render their ETH unsellable temporarily in exchange for staking rewards, signaling strong confidence in the network. The increased network activity follows guidance from the SEC’s Division of Corporation Finance and an additional commission statement that liquid staking may be exempt from securities laws; however, some SEC commissioners remain skeptical.

Liquid Staking on Ethereum in “Muddy Waters”

On August 5, 2025, the SEC’s Division of Corporation Finance released a “Statement on Certain Liquid Staking Activities.” The statement defined and clarified the division’s views on liquid staking. Liquid staking is a form of staking that issues a token representing a user’s staked asset, allowing investors to continue using decentralized finance (DeFi) protocols while earning staking rewards. The division stated that liquid staking activities, including the offer and sale of “staking receipt tokens,” do not constitute the offer and sale of securities as defined by the 1933 Securities Act, provided those tokens do not qualify as investment contracts. Consequently, entities issuing these tokens are not required to register with the SEC. This guidance was quickly hailed by the DeFi industry as a major win. Mara Schmiedt, CEO of blockchain developer company Alluvial, told Cointelegraph, “Institutions can now confidently integrate LSTs [liquid staking tokens] into their products, which is sure to drive new revenue streams, expand customer bases and enable the creation of secondary markets for staked assets.” Jito Labs CEO Lucas Bruder praised the guidance for demonstrating a nuanced understanding of liquid staking technology. However, not all SEC commissioners agree. Commissioner Caroline Crenshaw responded critically, stating the division’s statement “stacks factual assumption on top of factual assumption,” resulting in a “wobbly wall of facts without an anchor in industry reality.” She warned that the legal conclusions only apply if the many factual assumptions hold true.

“To the extent that any particular liquid staking activity deviates from the numerous factual assumptions laid out in the Liquid Staking Statement, that activity is outside the statement’s scope.”

Crenshaw emphasized the statement reflects only the views of one division, not the entire commission, and advised caution for entities involved in staking. On the other hand, SEC Commissioner Hester Peirce, known as “Crypto Mom,” supported the statement, affirming that liquid staking activities connected with protocol staking do not involve the offer and sale of securities. SEC Chairman Paul Atkins called the statement “a significant step forward in clarifying the staff’s view about crypto asset activities that do not fall within the SEC’s jurisdiction.”

Ethereum Ascendant as DeFi Remains in Legal Gray Area

Despite the limitations and debate around the SEC’s statement, the Ethereum ecosystem remains optimistic. Pseudonymous CryptoQuant author Onchainschool noted that more than 500,000 ETH (worth approximately $1.8 billion at the time) was staked in the first half of June alone, signaling rising confidence and a continued drop in liquid supply. Additionally, blockchain addresses with no selling history now hold nearly 23 million ETH, worth about $82.6 billion at current prices. Still, the DeFi industry, much of which is built on Ethereum’s framework, lacks clear legal recognition or regulation in many jurisdictions. In the US, the SEC recently delayed its decision on Bitwise’s application to add staking to its Ether exchange-traded fund (ETF). The CLARITY Act, aiming to establish regulations for DeFi, is progressing through Congress. It would exempt DeFi protocols from some standards applied to other crypto entities and allow them to launch and sell native tokens. Meanwhile, the European Union’s Markets in Crypto-Assets (MiCA) regulation currently lacks provisions for DeFi but is expected to prioritize DeFi regulation in 2026. Regulatory clarity appears imminent, and critical ecosystems like Ethereum are preparing for the evolving legal landscape.

Frequently Asked Questions (FAQ)

SEC Guidance on Liquid Staking

Q: What is the SEC's latest guidance on liquid staking? A: The SEC's Division of Corporation Finance released a statement suggesting that certain liquid staking activities, including the issuance of "staking receipt tokens," may not be considered securities offerings under the 1933 Securities Act, provided the tokens do not qualify as investment contracts. This implies that entities issuing such tokens may not need to register with the SEC. Q: Do all SEC commissioners agree with this guidance? A: No, there is not unanimous agreement. While Commissioners Hester Peirce and Chairman Paul Atkins have expressed supportive views, Commissioner Caroline Crenshaw has voiced strong dissent, raising concerns about the factual assumptions underpinning the division's statement and warning about its limited scope. Q: What are the implications of this SEC guidance for institutions? A: The guidance is seen as a significant step for institutions, potentially allowing them to confidently integrate liquid staking tokens (LSTs) into their products. This could lead to new revenue streams, expanded customer bases, and the development of secondary markets for staked assets. Q: What is liquid staking? A: Liquid staking is a process where users stake their cryptocurrency and receive a representative token (a "staking receipt token") in return. This token can then be used in other DeFi protocols while the underlying assets continue to earn staking rewards, offering liquidity to staked assets.

Crypto Market AI's Take

The recent surge in Ethereum transaction volumes, coinciding with the SEC's nuanced guidance on liquid staking, highlights the growing institutional interest and the evolving regulatory landscape. Our AI analytics tools at Crypto Market AI are continuously monitoring these developments. The increased staking activity signifies a robust belief in Ethereum's long-term potential and a growing comfort level with staking mechanisms, even amidst regulatory uncertainties. This trend aligns with our focus on providing cutting-edge insights into market dynamics, helping users navigate the complexities of the crypto space. For those interested in understanding the underlying technology and market sentiment, our deep dives into AI-powered analytics and market trends can provide valuable context.

Ethereum transaction volumes see year-high amid SEC staking drama