SEC Commissioner Peirce Warns Crypto Vault Curators Over Securities Laws

SEC Commissioner Hester Peirce has issued a warning to parties managing crypto vaults and on-chain lending strategies, stating that they may fall under US securities laws.

The statement, titled 'Headstands and Summervaults,' did not name any specific firm but rather focused on the architecture of protocols like Morpho, which allows curators to decide how assets are allocated and what collateral is acceptable.

Peirce acknowledged that vaults exist along a spectrum, from programmatic allocations determined solely by smart contracts to those with discretion held by another person or group. The key distinction lies in discretion, which Peirce sees as the trigger for regulatory scrutiny.

The commissioner's warning is aimed at firms like Gauntlet, one of the most prominent Morpho curators, which has more than $1.5 billion under management. While Gauntlet's original work involved providing recommended risk parameters, its current role in curating vaults gives it significant authority, a shift that Peirce is drawing attention to.