A controversial take by former SEC chief of staff Amanda Fischer has stirred backlash after she likened liquid staking to the financial maneuvers that triggered the 2008 collapse of Lehman Brothers.
SEC: Liquid Staking Isn’t a Security
In a Tuesday staff statement, the SEC clarified that certain liquid staking activities do not qualify as securities, meaning they fall outside the agency’s enforcement scope. This move was hailed by many as a win for DeFi and institutional adoption.
However, Fischer wasn’t impressed.
She took to X (formerly Twitter), warning that the SEC had just “blessed the same type of rehypothecation that cratered Lehman Brothers”, adding that in crypto it’s even riskier due to lack of oversight.
“You can do it without any SEC or Fed oversight,” she argued.
Her comment triggered strong reactions across the crypto community:
Matthew Sigel of VanEck called Fischer out for contradicting herself: “First you say the SEC is blessing crypto. Then you say crypto has no SEC oversight. Which is it?”
Mert Mumtaz, CEO of Helius Labs, accused her of being “intentionally obtuse” about how decentralized liquid staking tokens (LSTs) actually function.
Jason Gottlieb, a crypto lawyer, dismissed the analogy as “not technically or legally correct,” noting that blockchain-based rehypothecation is transparent—unlike the shadowy practices that doomed Lehman.
SEC Commissioners Split on Decision
The decision also divided SEC leadership:
Hester Peirce supported the move, calling liquid staking a modern solution to an age-old liquidity issue.
Caroline Crenshaw opposed it, criticizing the lack of regulatory clarity.
Liquid Staking TVL Climbs Despite the Noise
Despite the controversy, liquid staking protocols are thriving, with a $66.9 billion total value locked (TVL)—up 14.5% year-to-date.
Lido Finance leads the market with $31.9B TVL.
Binance Staked ETH has grown nearly 90% in 2025 alone.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.
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