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

Foresight News reports that Hester Peirce, a commissioner of the U.S. Securities and Exchange Commission (SEC), has issued a statement highlighting the relationship between crypto vaults and on-chain lending strategies with federal securities laws. Peirce stated that migrating crypto asset activities subject to federal securities laws onto the blockchain does not mean these activities are exempt from the jurisdiction of securities laws. She noted that vault products vary widely in design, ranging from those entirely governed by immutable smart contracts to those fully controlled by specific individuals or groups. Parties involved in managing vaults or on-chain lending strategies—including selecting yield-generating activities, adjusting asset allocations, setting interest rates, determining acceptable asset types, and liquidation thresholds—must evaluate whether their activities trigger obligations under federal securities laws. Peirce also emphasized that the SEC welcomes proactive communication from relevant market participants to collaboratively explore compliance pathways and solicit feedback from the market on whether existing rules need to be amended to accommodate innovations such as vaults and on-chain lending.