Ethereum Transaction Volumes Surge Amid SEC Staking Debates

Interest in cryptocurrencies continues to grow. Ethereum, a leading blockchain network, recently saw its transaction volumes reach a one-year high. This surge in activity comes as the US Securities and Exchange Commission (SEC) weighs in on the classification of liquid staking protocols. The regulatory discussions add a layer of complexity to an already dynamic market. Understanding these developments is crucial for any crypto enthusiast. Furthermore, the amount of Ether (ETH) staked on the network has also hit historical highs.

Ethereum Transaction Volumes Reach New Peaks

Transactions on the Ethereum network have indeed reached a significant one-year high. This milestone coincides with new guidance from the SEC regarding staking. Notably, over 36 million Ether (ETH) is now staked on Ethereum, according to Dune Analytics. This figure represents nearly 30% of the total token supply. A large number of tokens locked into smart contracts suggests a strong commitment from Ether holders. They prefer to render their ETH unsellable for now, opting instead for staking rewards. Therefore, this increased network activity reflects growing confidence in the Ethereum ecosystem.

SEC Staking Guidance: A Closer Look

The increased network activity follows specific guidance from the SEC. The commission also issued an additional statement. This statement suggested that liquid staking might be exempt from securities laws. However, commentary from one commissioner indicates that the situation is not straightforward. On Tuesday, the SEC’s Division of Corporation Finance released a “Statement on Certain Liquid Staking Activities.” In this document, the division defined and explained its views on liquid staking. Liquid staking is a form of staking. It issues a token representing a user’s staked asset. This allows investors to use decentralized finance (DeFi) protocols while earning staking rewards. Therefore, it offers flexibility to participants.

The division stated that liquid staking activities, as well as the offer and sale of “staking receipt tokens,” as described in their statement, do not “involve the offer and sale of securities” under the 1933 Securities Act. Consequently, entities issuing “staking receipt tokens” do not need to register with the SEC. This applies as long as those tokens do not constitute an investment contract. The DeFi industry largely welcomed this updated guidance. Mara Schmiedt, CEO of Alluvial, noted, “Institutions can now confidently integrate LSTs [liquid staking tokens] into their products.” She believes this will drive new revenue streams and expand customer bases. Lucas Bruder, CEO of Jito Labs, praised the guidance for its “nuanced understanding of LST technology.”

Liquid Staking Protocols in Focus

Despite the positive industry reception, not everyone at the SEC agrees. On Wednesday, Commissioner Caroline Crenshaw responded. She argued that the division’s statement “stacks factual assumption on top of factual assumption on top of factual assumption.” This, she claimed, resulted in a “wobbly wall of facts without an anchor in industry reality.” Crenshaw asserted that their definition of staking “might not reflect prevailing conditions on the ground.” Therefore, she cast doubt on its practical applicability. Per Crenshaw, the legal conclusions of the statement—that LSTs are exempt from securities laws—apply only if those many factual assumptions hold true. She emphasized, “To the extent that any particular liquid staking activity deviates from the numerous factual assumptions laid out in the Liquid Staking Statement, that activity is outside the statement’s scope.”

Crenshaw concluded that the statement reflects only the views of a single division, not the entire commission. She advised that it should give “little comfort” to entities involved in staking. However, the statement does have allies within the SEC. Commissioner Hester Peirce, known as “Crypto Mom,” released her own statement. She affirmed the division’s view that “liquid staking activities in connection with protocol staking do not involve the offer and sale of securities.” Chairman Paul Atkins called it “a significant step forward in clarifying the staff’s view about crypto asset activities that do not fall within the SEC’s jurisdiction.”

Ether Staked: Confidence and Supply Dynamics

Regardless of the statement’s limitations or potential outcomes, the Ethereum ecosystem remains optimistic. Pseudonymous CryptoQuant author Onchainschool observed a significant trend. In a Tuesday post, they noted that more than 500,000 ETH was staked in the first half of June alone. This amount was worth approximately $1.8 billion at the time of publishing. “This growth signals rising confidence and a continued drop in liquid supply,” they stated. Moreover, blockchain addresses with no selling history are also increasing. These addresses now hold nearly 23 million ETH, valued at some $82.6 billion at current prices. This trend highlights a long-term holding strategy among many participants. The increase in **Ether staked** demonstrates a strong belief in the network’s future.

One-year chart of transactions on the Ethereum network. Source: Nansen

Ether staked and validators since November 2020. Source: Dune

DeFi Regulations: The Road Ahead

Despite Ethereum’s growth, the DeFi industry largely lacks clear legal recognition or regulation in many jurisdictions. Much of DeFi is built on Ethereum’s framework. In the US, the SEC recently delayed its decision on Bitwise’s application. This application sought to add staking to its Ether exchange-traded fund (ETF). Meanwhile, the CLARITY Act is still progressing through Congress. This bill aims to establish some regulations for the DeFi industry. It would exempt DeFi protocols from certain standards applied to other crypto entities. This would allow them to launch and sell native tokens. In Europe, the Markets in Crypto-Assets (MiCA) regulation does not currently include provisions for DeFi. However, this will reportedly become a priority for the bloc’s lawmakers in 2026. Sooner or later, it appears that comprehensive **DeFi regulations** are coming. Ecosystems critical for the industry, like Ethereum, are preparing for this future. This regulatory evolution will shape the industry for years to come.