Former SEC Official Amanda Fischer Criticizes Agency’s View on Liquid Staking: “A Recipe for Collapse”
Amanda Fischer, a former top aide to ex-SEC Chair Gary Gensler, voiced strong criticism of the agency's recent assessment that some liquid staking products might not qualify as securities. Fischer likened the practice to the financial risks that led to the 2008 collapse of Lehman Brothers, warning that synthetic tokens could amplify systemic risk across the crypto sector.
“This is Lehman Brothers All Over Again”
In a series of comments posted after the SEC released its updated stance, Fischer warned that liquid staking could lay the groundwork for a major crisis.
“Liquid staking allows users to deposit crypto with an exchange and receive a synthetic token in return. These tokens are issued by centralized entities. The holder earns yield from the original asset and continues to invest using the synthetic one. It’s no different than what Lehman Brothers did with client funds,” she said.
She emphasized that the synthetic nature of these assets—and their layering—mirrors the kind of leverage seen in the lead-up to the subprime mortgage crisis.
Fragile Layers of Leverage
Fischer drew a direct comparison between synthetic staking tokens and the highly-leveraged mortgage-backed securities that triggered the 2008 crash:
“Assets are staked, then re-staked, and re-staked again. Synthetic tokens built on top of synthetic tokens. It's the same dangerous structure as mortgage-backed leverage. A risky loan is one thing, but if you stack 30 layers of financial engineering on top of it, disaster is inevitable,” she explained.
She also warned that a hack or failure involving one of these tokens could ripple across the ecosystem, leading to widespread losses and instability.
Crypto Industry Pushes Back
Fischer’s remarks sparked backlash from crypto industry figures. Austin Campbell, founder of Zero Knowledge Consulting, criticized her perspective as outdated:
“People like this still view the world through a legacy financial lens—centralized systems with intermediaries. That was the 1970s. They don’t understand the control mechanisms of automated, decentralized protocols. If you control the protocol, you control the funds. If you don’t, you don’t,” Campbell said.
The comments came just one day after the SEC released a statement indicating that some liquid staking products may fall outside the scope of securities regulations. Fischer, who now works with the policy group Better Markets—which also opposes crypto ETFs—posted her critique in response to the announcement.
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