US SEC Statement: Vaults and On-Chain Lending May Involve Securities Regulation

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

The statement pointed out that parties involved in managing Vaults, such as those selecting yield strategies, reallocating funds among different yield-bearing assets, and choosing managers responsible for investment decisions, need to assess whether their activities fall under federal securities laws. Furthermore, entities involved in managing these lending strategies, including setting interest rates, deciding which assets to support, establishing Loan-to-Value (LTV) limits, and defining liquidation criteria, also need to analyze whether these actions involve federal securities laws.

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

Finally, the statement welcomed market participants to provide feedback on whether existing rules need to be amended to accommodate Vaults, on-chain lending, and other innovations; and how to achieve innovative development while protecting investors, ensuring fair, orderly, and efficient markets, and facilitating capital formation.