Simply put
- Amanda Fischer, who previously worked as chief of staff for SEC Chair Gary Gensler, has drawn a parallel between liquid staking and risky financial practices that contributed to the downfall of Lehman Brothers.
- Some crypto lawyers and industry founders believe Fischer is overstating the SEC’s position.
- Fischer’s claims have been challenged by figures from Vaneck, Solana’s Helius Labs, and Magic Eden, who label them as misinformation.
The comments from former SEC officials about potential risks of liquid staking have ignited discussions among industry participants, raising questions about regulatory approaches to staking tokens in the U.S.
Amanda Fischer recently spoke on X, suggesting that the agency’s position on liquid staking mirrors the risky practices that led to Lehman Brothers’ downfall.
She contends that liquid staking enables the creation of synthetic tokens via intermediaries, thereby allowing assets to be reused without adequate oversight.
Fischer likens this to the “re-guarantee” practices seen before the 2008 financial crisis.
Crypto advocates are wary, arguing that the associated risks are heightened due to decentralization and a lack of thorough monitoring.
But some experts suggest the true issue isn’t leverage, but rather how regulators perceive the crypto space.
Austin Campbell, founder of Zero Knowledge Consulting, noted that many policymakers still assess crypto using outdated frameworks from the 1970s, leading to misunderstandings.
He emphasized that it’s crucial for regulators to recognize who holds control over protocols and, consequently, the funds.
Kurt Watkins, a blockchain lawyer, mentioned that while Fischer raises important concerns regarding staking, her interpretation may exaggerate the SEC’s actual statements.
According to Fischer’s guidance, the SEC’s focus is quite narrow, often conflating straightforward receipt tokens with more complex financial products.
Watkins clarified that the focus is on liquid staking setups where the provider does not exercise discretion, stating that receipt tokens simply represent passive claims to the original asset.
Fischer’s remarks have drawn swift criticism from the crypto community.
Some have pointed out apparent contradictions in her position, questioning her perspective on SEC oversight.
Joe Doll, General Counsel at Magic Eden, criticized Fischer’s comments as “incredibly misleading,” implying either a fundamental misunderstanding of liquid staking or potentially intentional misrepresentation.
Mert Mumtaz, CEO of Helius Labs, was blunt in his response, asserting that comparing an auditable, transparent system to shady practices mischaracterizes the former.
Fischer is reportedly focusing on a different market now and remains opposed to the creation of a U.S. Bitcoin ETF.
The SEC has yet to respond to media inquiries regarding this matter.
