Amanda Fischer, the former Chief of Staff to SEC Chair Gary Gensler, compared liquid staking to the risky rehypothecation practices that led to the collapse of Lehman Brothers. She argues that liquid staking creates synthetic tokens, allowing assets to be reused without clear oversight, which could amplify risks in decentralized finance (DeFi). However, industry experts like Austin Campbell and Kurt Watkins counter that Fischer's interpretation overstates the SEC's stance regarding liquid staking, maintaining that many stakeholders do not use leverage, and regulators are misinterpreting decentralized assets. Fischer’s remarks elicited strong reactions from crypto leaders, who criticized her claims as misleading or lacking in understanding of the underlying technology. Experts stressed the importance of recognizing how decentralized systems function compared to traditional finance, indicating a disconnect in regulatory perspectives. Fischer now works with Better Markets, focusing on evolving policy in the crypto space.

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