2/ Now, some of the wrong parts. First, liquid staking is the process of staking a token and receiving a receipt for it in the form of a liquid staking token. This is... not rehypothecation? It could be rehypothecation if you then stake the liquid staking token, and then stake the stake in the stake of the liquid staking token, on and on to infinity, depending on the characteristics of what you are doing with the staking. But you will note in the SEC statement, they did not say ALL forms of liquid staking are allowed, just that certain types of arrangements, which in this case involve a single act of staking, are allowed. This is not rehypothecation! That's just staking! It's staking and specifically getting a token for it to track that interest, mainly because it makes it easier to trade the staked position. In many ways, the correct analogy here is bonds trading with the coupon attached (e.g. dirty in bond lingo), because now you have a token that includes staking rewards. That's not rehypothecation! Second, there are some serious misunderstandings of the mechanics of staking in here. Amanda alleges that there are very long wait times for unstaking assets, which are highly variable in reality. They range from immediate (ADA) to one year (AVAX, which you had to pre-agree to so knew that going in), but most are a matter of days. I find it fascinating that Amanda characterizes this as "very long" when the SEC itself was fine with multi-day security settlement and also allows interval funds that only allow withdrawals on a periodic basis, sometimes as rarely as annual, and with a gate that means it could take decades to get all of your funds out if everyone is trying to withdraw. But no, waiting a few days for staking is "very long". This just isn't credible on a stand-alone basis, but hilariously, the liquid staking token is literally the solution to this problem. Read that again. The very thing she is mad about solves the problem she is mad about. This is like saying cars might run out of gas, so we should ban gas stations. The liquid staking token can be traded without the underlying assets being unstaked, so you have constant instant liquidity if you need it. Instant! Instant is not very long under any meaningful definition of those words. This is a deep (and hilariously bad) misunderstanding of market structure. Also, there are plenty of products to manage price risk in the meantime while unstaking (like perpetual futures), which the US regulators have helpfully also hugely obstructed. In short: the exact risk she is worried about here, which is long wait times to redeem your vault receipt creating price risk (as I assume that's the risk she is actually worried about, since there is no leverage and no default risk) are a solved problem for everyone outside the US, but US regulators decided to protect investors by banning investors from protecting themselves. Third, some of the technical details are a bit mangled. I do agree there are novel technological risks from crypto like hacks and exploits, but the idea that there are "intermediaries" in the traditional sense in some of these implementations is simply wrong. That, or the SEC believes vending machines are "intermediaries" in the legal sense of the word. This is something that has absolutely flummoxed the US regulatory crowd who never got comfortable with the internet and is still deeply skeptical of PayPal because you can't open up your iPhone and take the physical dollar bills out, but it's possible to create automated systems with code. Intermediary here simply often does not have the meaning it has in finance, if it has one at all. Though, obviously, for the DINOs (decentralized in name only) this is a fair and reasonable critique. The problem is you have to do the work to identify which is which, not just throw the whole space out. Otherwise, you believe all asset managers should be shut down because of Bernie Madoff. Do you believe that? Finally, even if we grant the concerns, it's not obvious the SEC is the correct regulator to be dealing with this. Let us be very clear: the SEC guidance merely says this is not a securities transaction. Do you want some other non-securities transactions? Bank deposits! Also futures on commodities (like gold). Those things obviously have risks associated with them (the banks fail all the time, in fact), but being risky does not equal being a security. This was a crippling problem with the Gensler SEC, of which Amanda was a part: they were twisting themselves into a pretzel so convoluted that even topologists would tell them to chill out in order to try to get jurisdiction over things they thought, in their personal judgment and on the merits, were risky. This is not the job of the SEC. The SEC is not a merits regulator, and their job is confined to securities (the S part of the SEC). Torturing things to try to turn them into securities when they are transparently not as a regulatory land grab is far outside the scope of the agency's remit. So as a starting point, the blanket implication or outright assertion that the SEC (or Fed) is the right regulator here is one of those "citation needed" moments. Arguing that staking is a form of rehypothecation in this way is... curious. Unless your goal is purely to seize power to impose your beliefs without due process. Then it's pretty clear why someone would want that.