Galaxy and Liquid Collective partner to offer Ethereum liquid staking to institutions

Galaxy and Liquid Collective said on Tuesday that they have entered into a partnership designed to provide institutional access to liquid staking.

The forging of the partnership comes on the heels of the Securities and Exchange Commission saying in May that staking activities do not constitute the creation of a security or investment contract.

As part of the partnership, Galaxy will provide OTC support for Liquid Collective’s liquid staking token for Ethereum, LsETH. The two organizations said they will eventually expand to offer liquid staking for Solana. Liquid staking allows holders to stake crypto while maintaining liquidity.

"Liquid Collective’s LsETH is the only LST on the market purpose-built to meet institutional needs through a distributed, interoperable, and compliance-focused approach," according to a statement. Along with Galaxy, Coinbase, Kraken, BitGo, Blockdaemon, and Anchorage Digital are also supporters of Liquid Collective.

Galaxy will also become a node operator for the Liquid Collective network, according to the statement. Liquid Collective has over $700 million in total value locked (TVL), according to DefiLlama.

"The future of staking hinges on robust, interoperable solutions that provide not just yield, but true liquidity and utility," Galaxy's Head of Strategic Opportunities, Zane Glauber, said in the statement.

SEC paves the way

In May, the SEC said its new view applies to the staking of "covered crypto assets" on proof-of-stake networks, activities of third-party service providers such as custodians and node operators, and ancillary services. 

"With recent regulatory tailwinds and institutional demand on the horizon, this partnership with Galaxy meaningfully advances our mission to deliver secure, accessible and liquid staking to the mainstream market," Alluvial co-founder and CEO Mara Schmiedt said in Tuesday's statement announcing the partnership.

Alluvial is the company behind the liquid staking protocol Liquid Collective. Schmiedt became CEO of Alluvial in 2023.

Since the Trump administration took office, the SEC has made inroads in providing clarity regarding crypto regulation. In March, the SEC also clarified that proof-of-work mining activities are not considered securities activities.