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Hester Peirce, a commissioner at the U.S. Securities and Exchange Commission, said crypto vault and lending services may be subject to securities laws.
In a statement on July 22, Peirce said certain crypto lending and vault services could fall under federal securities laws.
The principle that “tokenized securities are still securities” also applies to crypto vaults, she said. Peirce added that the term “vault,” like many other new technologies in crypto, lacks a clear and widely accepted definition, and its functions and operating strategies are evolving quickly. Vaults that allocate assets by holding or investing in securities could also qualify as investment companies.
Crypto lending services may intersect with federal securities laws in several ways, she said. On-chain lending can have the characteristics of notes that qualify as securities, depending on the parties’ purpose, the method of distribution and other relevant factors. Activities involved in managing vaults and lending strategies may also raise regulatory issues related to investment advisers.
Whether a specific vault or lending strategy is subject to federal securities laws ultimately depends on the facts and circumstances of each case, Peirce said. She added that she welcomes inquiries from market participants designing and operating vaults or supporting on-chain lending.
