U.S. SEC Statement: Vaults and On-Chain Lending May Involve Securities Regulation

Odaily Odaily News The U.S. Securities and Exchange Commission (SEC) issued a statement indicating that Vaults allocate user assets to income-generating strategies such as staking and lending via smart contracts to help users earn returns. However, the related management activities may involve securities regulation.

The statement points out that parties involved in managing Vaults, such as those selecting yield strategies, reallocating funds between different yield-bearing assets, and choosing the managers responsible for investment decisions, need to assess whether their activities fall under the purview of federal securities laws. Furthermore, entities involved in managing these lending strategies, such as setting interest rates, determining which assets to support, establishing loan-to-value (LTV) ratio limits, and formulating liquidation criteria, also need to analyze whether these actions involve federal securities laws.

The statement also indicates that on-chain lending strategies may similarly raise significant securities law issues. For example, depending on the motivations of the participants, the method of product distribution, and other relevant factors, on-chain loans could potentially exhibit characteristics of securitized debt instruments (notes).

The statement concludes by welcoming input from market participants. This includes feedback on whether existing rules need modification to accommodate Vaults, on-chain lending, and other innovations, as well as how to achieve innovative development while protecting investors, ensuring fair, orderly, and efficient markets, and facilitating capital formation.