Ether Liquid Staking Tokens Jump on Rumors of SEC Ban for Staking Providers

Coinbase CEO Brian Armstrong said he heard rumors about a possible ban on staking providers in the U.S.

AccessTimeIconFeb 9, 2023 at 6:18 a.m. UTC
Updated Mar 8, 2024 at 4:46 p.m. UTC

Liquid staking tokens jumped overnight as investors bet on growth in decentralized staking products amid rumors of their centralized counterparts facing a possible ban in the U.S.

The liquid staking sector jumped 5.4% on average, CoinGecko data shows, while the broader crypto market capitalization slid 3.4%.

Tokens of market leader Lido jumped by 9% before retreating on Thursday. Rocket Pool’s RPL and Stader’s SD tokens rose 10% in the past 24 hours.

Liquid staking refers to the exchange of staked ether for tokenized versions of ether that can be used in decentralized finance (DeFi) applications. Uses range from using these tokens as collateral for loans or margin trading to earning yield.

As CoinDesk reported Thursday, Coinbase CEO Brian Armstrong tweeted he heard rumors that the U.S. Securities and Exchange Commission would like to ban retail investors from engaging in cryptocurrency staking.

The value of staked assets was about $42 billion in the fourth quarter of 2022, with annualized staking rewards of $3 billion, according to a report from Staked, a noncustodial staking service provider. That figure was not limited to just retail investors.

Prominent traders on Crypto Twitter hypothesized the flow of these funds into DeFi alternatives such as Lido and Stader, which may explain the immediate price bump for related tokens.

The rumors come ahead of next month’s highly anticipated Shanghai upgrade on Ethereum, which will allow investors to withdraw their ether staked on the Ethereum blockchain – as staked ether cannot be withdrawn or freely traded currently.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Shaurya Malwa

Shaurya is the Deputy Managing Editor for the Data & Tokens team, focusing on decentralized finance, markets, on-chain data, and governance across all major and minor blockchains.

Read more about