On July 22, SEC Commissioner Hester Peirce issued a statement cautioning that crypto vaults and onchain lending strategies can still trigger federal securities laws depending on the specific facts and circumstances, even though much of the SEC’s recent work has clarified that many crypto assets and activities fall outside those laws. Peirce warned that stretching legal interpretations to exempt crypto assets and activities well within the scope of those laws would ultimately fail, and said market participants are better served by working with the SEC to find a compliant path that lets them use new technology to serve investors. Peirce described vaults as tools that use smart contracts to allocate users’ crypto assets to yield-generating activities such as staking and lending, noting that vaults fall along a spectrum ranging from “allocations determined solely by immutable smart contracts” to “allocations made at the sole discretion of another person or group of persons.” Peirce wrote that moving activities within the scope of the federal securities laws onchain does not remove them from the SEC’s jurisdiction, a principle she first raised in a July 2025 statement on tokenized securities.

Peirce additionally asserted that a vault could be a “common enterprise in which users invest money with a reasonable expectation of profits to be derived from the vault deployer’s and curator’s entrepreneurial or managerial efforts,” and separately noted that a vault holding or allocating assets to securities could fall into investment company territory, functioning like a unit investment trust, a management investment company, or a separately managed account, depending on its structure. Peirce added that parties managing crypto lending strategies, including by setting interest rates, deciding which assets to accommodate, setting loan-to-value limits, and establishing liquidation thresholds, may want to analyze whether their activities implicate the federal securities laws, reasoning that onchain loans can bear the “hallmarks of notes that are securities” depending on the parties’ motivations, the plan of distribution, and other relevant factors.

Peirce stated that managing vaults and lending strategies also may implicate investment adviser issues, and that any SEC analysis requires respecting the limits Congress set on its jurisdiction while protecting developers’ free speech rights. She invited inquiries from market participants involved in designing and operating vaults or facilitating onchain lending, and welcomed feedback on whether the SEC needs to modify its rules to accommodate such innovations while continuing to ensure that investors are protected, markets are fair, orderly, and efficient, and capital formation is facilitated.