SEC Commissioner Warns Crypto Vaults and Lending Products May Fall Under Securities Law on July 22

According to SEC Commissioner Hester Peirce, on July 22, moving crypto onto a blockchain does not automatically exempt it from securities law. In a statement titled "Headstands and Summervaults," Peirce cautioned that some companies are stretching legal interpretations through questionable arguments to avoid SEC oversight. A crypto vault may qualify as a security if it functions as a common enterprise where investors expect profits from active management, and onchain loans could legally resemble notes under securities regulations. Peirce encouraged companies building such products to contact the SEC directly to find compliant paths forward.
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