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SEC Commissioner Hester Peirce Warns That Crypto Vaults and Lending Strategies May Be Subject to Securities Law Regulation
Svmuu News: SEC Commissioner Hester Peirce issued a statement saying that the fact that crypto assets are “on-chain” does not automatically exclude related activities from the scope of federal securities laws. The statement noted that “crypto vaults” and lending strategies that use smart contracts to allocate assets on-chain for the purpose of generating returns may constitute joint ventures, investment companies, or securitized instruments if decisions regarding staking, lending allocations, interest rates, eligible assets, LTV ratios, and liquidation thresholds are made by specific individuals or teams. and that relevant parties must assess whether they are subject to regulatory requirements such as those governing securities offerings and investment advisory services. Peirce stated that she welcomes industry participants to engage with the SEC regarding compliance pathways and to provide feedback on how current rules could be adjusted to accommodate crypto vaults and on-chain lending.
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