SEC Commissioner Statement: Some Crypto Vaults and On-Chain Lending Strategies May Be Subject to Federal Securities Regulations

Foresight News reports that US Securities and Exchange Commission (SEC) Commissioner Hester Peirce issued a statement, offering guidance on the relationship between crypto vaults (Vault) and on-chain lending strategies with federal securities law. Peirce noted that moving crypto asset activities subject to federal securities law onto the blockchain does not mean these activities are outside the jurisdiction of securities law. She pointed out that vault products vary greatly in form due to design differences, ranging from asset allocation determined entirely by immutable smart contracts to decisions made exclusively by specific individuals or groups. Parties involved in managing vaults or on-chain lending strategies—including choosing yield-generating activities, adjusting asset allocations, setting interest rates, deciding acceptable asset types, and liquidation thresholds—must assess whether their actions trigger obligations under federal securities law. Peirce also stated that the SEC welcomes proactive communication from relevant market participants to collaboratively explore paths to compliance and invites market feedback on whether existing regulations need to be revised to accommodate innovations like vaults and on-chain lending.