SEC staff’s staking-token split spotlights the exit risks behind staked ETH tokens

An ETH holder can sell a liquid-staking token while the ETH behind it remains staked. A Sept. 25 SEC staff FAQ draws a conditional distinction between receipts that evidence ownership and protocol-issued tokens. Coinbase and Lido disclosures show the holder's practical stake: a transferable token does not guarantee immediate unstaked ETH or a sale at the underlying position's value.

The Securities and Exchange Commission's Division of Corporation Finance said a qualifying staking receipt for a digital commodity may be a “digital tool.” A token issued by a protocol-based liquid-staking provider may instead be a “digital commodity.” The staff does not classify Coinbase's cbETH or Lido's stETH by name. Their terms determine who holds the deposited ETH, how the token can be redeemed and what can happen if its holder sells instead.

What counts as a receipt

The staff FAQ defines a receipt by the rights it represents. It evidences that an asset was deposited and that the depositor retains ownership. Under the FAQ's description, ownership and control do not pass to the receipt issuer, which cannot transfer, lend, pledge, rehypothecate or otherwise use the deposited asset, or expose it to third-party claims. That is a description of the type of receipt the staff is discussing, not a new custody rule for every token sold as liquid staking.