The Proof of Stake Alliance (POSA), a nonprofit industry alliance, has published two white papers examining on the status of deposit tokens in United States securities and tax law on Feb. 21. The papers were authored by representatives of over 10 industry groups. The paper said:

“Receipt Tokens evidence ownership of intangible commodities in the digital world in a substantially identical manner that warehouse receipts, bills of lading, dock warrants and other documents of title evidence title to tangible commodities in the physical world.”

In line with capital gains taxation, the argument continued, “a liquid staking arrangement will be a taxable event only if there is a sale or other disposition of cryptoassets in exchange for property that differs materially in kind or extent,” which is standardly referred to as “realization” of an asset.