The SEC has exempted liquid staking services, including Lido and Jito, from regulation, allowing them to issue staking tokens and distribute rewards without registering with the agency. This decision follows an earlier exemption in May that allowed self-custodial and custodial staking to operate outside the SEC’s jurisdiction. Liquid staking, an essential aspect of DeFi, enables users to deposit cryptocurrencies and receive tokens that maintain liquidity while earning staking rewards. Lido, the largest player in this space, holds over $31 billion in ETH. The SEC clarified that participants in liquid staking activities do not need to register transactions under the Securities Act. This exemption reflects a broader trend of the SEC under President Trump, which has seen the agency carve out significant sectors of the crypto industry from regulatory oversight. It represents a shift from previous government actions that had targeted custodial staking providers with lawsuits while leaving liquid staking firms like Lido and Jito unharmed.

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