Crypto vaults could fall under SEC rules, Hester Peirce warns

U.S. Securities and Exchange Commission Commissioner Hester Peirce has warned that some crypto vaults and onchain lending strategies may fall under federal securities laws, depending on how operators structure and manage them. Summary Peirce warned crypto vaults may trigger securities laws when managers control investment decisions and strategies. Onchain lending can also fall under SEC rules depending on loan structure, distribution, and management. SEC will assess vaults and lending strategies individually rather than treating all products the same. In a July 22 statement, Peirce said moving financial activity onchain does not remove legal duties when that activity already sits within the SEC’s regulatory scope. She urged developers and operators to examine how their products work instead of assuming blockchain technology places them outside existing law. Peirce said the SEC has spent the past year and a half clarifying which crypto assets and activities fall under federal securities laws. She also stressed that a more tailored approach to crypto does not mean every product sits outside the agency’s reach. “You will have a painful fall,” she said. The warning targeted market part...