SEC Highlights Exit Risks for Staked ETH Tokens

The Securities and Exchange Commission's Division of Corporation Finance released a staff FAQ on September 25 that drew attention to the potential risks associated with staked ETH tokens. The document highlighted the distinction between staking receipts, which evidence ownership, and protocol-issued tokens, which can be considered digital commodities.

According to the FAQ, a receipt issued by a protocol-based liquid-staking provider may itself be a digital commodity if its value is linked to a functioning crypto system and market supply and demand. However, this classification does not guarantee that the holder has immediate access to the underlying ETH or can sell it at the same value as staked ETH.

Coinbase's cbETH and Lido's stETH were used as examples of liquid-staking tokens, but the FAQ did not classify either token by name. The document emphasized that a transferable token does not automatically grant the holder immediate redemption or sale at the underlying position's value.