Ex-SEC Chief of Staff Compares Liquid Staking to Lehman, Crypto Industry Fires Back

A former top SEC official’s warning that liquid staking could trigger crypto’s own Lehman-style collapse has drawn sharp rebuke from industry participants, reigniting debate over how the U.S. should regulate staking tokens.

Amanda Fischer, who served as Chief of Staff under former SEC Chair Gary Gensler, wrote Monday on X that the agency’s stance on liquid staking amounts to “blessing the same type of rehypothecation that cratered Lehman Brothers.”

Fischer argues that liquid staking creates synthetic tokens through intermediaries, allowing assets to be reused without clear oversight.

She likened it to “rehypothecation,” which is the reuse of client collateral by institutions for their own trades, as practiced at Lehman Brothers before the 2008 financial crisis.

In crypto, she warned, the risks are amplified by decentralization and the ability for assets to “be restaked and restaked and restaked” with arguably little oversight.

Yet crypto observers say the issue isn’t leverage but how regulators see crypto.

Austin Campbell, founder of crypto risk and compliance advisory firm Zero Knowledge Consulting, said that many policymakers continue to approach crypto through older lenses.

“They live in a world that is centralized and intermediated, because that was the only way to do things effectively in the 1970s when these systems were designed,” Campbell told Decrypt. “They don't realize that they think of everything as centralized, so automated systems really throw them.”

Still, the question for regulators is in recognizing “who has control,” Campbell said. “If you can control the protocol and the actions, you have control of the funds. If you can’t, you don’t. It all comes down to how it’s executed.”

Kurt Watkins, a blockchain attorney and founder who advises crypto startups on regulatory strategy, told Decrypt Fischer is raising valid concerns about how staking can be misused, but argued that her interpretation is “overstating” what the SEC actually said.

Fischer’s reading of the SEC guidance may be “pretty narrow,” Watkins said, by conflating receipt tokens with more complex products.

“It's focused on liquid staking setups where the provider doesn't exercise discretion and the receipt token is just a passive claim on the original asset, not some synthetic product or leveraged position,” Watkins told Decrypt.

Fischer’s post has triggered swift backlash from prominent crypto figures.

First, you say the SEC is blessing crypto. Then you say crypto has no SEC oversight. Which is it? You’re contradicting yourself mid-rant,” Matthew Sigel, head of digital assets research at VanEck, wrote on X.

Joe Doll, general counsel at Magic Eden, also weighed in, calling Fischer’s post “incredibly misleading.”

It “demonstrates either a misunderstanding of the basic technological features that underpin liquid staking (dumb/ill-prepared), or deliberate mischaracterization (malicious),” he wrote.

Meanwhile, Mert Mumtaz, CEO of Solana infrastructure firm Helius Labs, was more direct.

 “Comparing transparent, decentralized systems governed by auditable code to opaque, shady ones enforced by crooks and saying the former is worse is insane work,” he responded. “You either have no idea how LSTs actually work or are being intentionally obtuse.”

Fischer now works at Better Markets, the same policy group that strongly opposed the creation of U.S. spot Bitcoin ETFs.