#SECWarnsOnChainLendingMayFallUnderSecuritiesLaw



The SEC is sending a clear signal: moving lending and yield strategies onto a blockchain doesn't exempt you from federal securities laws.

Here’s the breakdown of Commissioner Peirce's warning:

· The Core Rule: "On-chain" ≠ "unregulated." The activity itself matters more than the technology.
· For Vault Operators: If you actively select strategies or rebalance assets, you may be operating an investment company or a common enterprise – triggering SEC registration.
· For Lending Protocols: Setting interest rates, defining collateral, and managing liquidations could classify certain loans as securities under specific conditions.
· The Key Factor: The more managerial discretion you exercise, the clearer your compliance obligations become.

The Bottom Line: DeFi is not a regulatory safe haven. The SEC is inviting proactive discussions to revise rules, but for now, active management equals active regulation.
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