U.S. SEC Commissioner Peirce posts a warning about crypto vaults and lending strategies that may involve securities law regulation

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PANews July 22 reported that, according to the U.S. SEC website, SEC Commissioner Hester Peirce issued a statement saying that the “on-chain” nature of crypto assets does not automatically exclude related activities from the scope of federal securities laws. The statement notes that crypto vaults and lending strategies that configure assets on-chain via smart contracts to generate yield may, if staking, lending/asset allocation, interest rates, acceptable assets, the LTV ratio, and liquidation thresholds are determined by a particular individual or team, constitute a common enterprise, an investment company, or securitized notes. Relevant participants need to review whether they may trigger regulatory requirements such as securities issuance and investment adviser rules. Peirce said she welcomes industry practitioners to communicate with the SEC on compliance paths and to offer input on how existing rules could be adjusted to accommodate vaults and on-chain lending.
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