SEC Commissioner Hester Peirce Warns Crypto Vaults and Lending Strategies May Fall Under Securities Law

Odaily Odaily News: SEC Commissioner Hester Peirce issued a statement noting that the "on-chain" deployment of crypto assets does not automatically exclude related activities from the scope of federal securities laws. The statement pointed out that crypto vaults and lending strategies that use smart contracts to configure assets on-chain to generate returns—where specific individuals or teams determine the staking and lending allocation, interest rates, acceptable assets, LTV ratios, and liquidation thresholds—may constitute a common enterprise, investment company, or securitized instrument. Relevant participants need to assess whether they trigger securities issuance, investment adviser, or other regulatory requirements. Peirce stated that she welcomes industry participants to engage with the SEC regarding compliance pathways and to provide input on how existing rules can be adjusted to accommodate vaults and on-chain lending.