SEC Warns Crypto Vaults May Fall Under Securities Laws

US SEC Commissioner Hester Peirce has warned that certain crypto 'vaults' and on-chain lending products may fall under federal securities laws. These products involve discretionary decisions about how user assets are managed, such as asset allocation, yield activities, lending terms, and liquidation thresholds.

The warning comes as on-chain yield products continue to proliferate, with companies packaging DeFi strategies into products that aim to make returns and risks more accessible. Peirce emphasized that shifting activity onto a blockchain does not automatically remove it from securities-law scrutiny.

According to Peirce, some crypto vaults could potentially be treated as securities offerings or investment companies, depending on how they operate. Operators who control allocation choices or lending parameters may also face investment adviser regulatory exposure.