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SEC commissioner warns crypto vaults could face securities scrutiny

Peirce said questions arise when humans choose yield routes and move assets, and she noted the legal outcome would depend on each vault’s structure and activities.

Reported · Written up by our desk · Regulation

SEC Commissioner Hester Peirce has warned that crypto yield vaults may face scrutiny under federal securities laws when people retain control over how assets earn yield, according to CryptoSlate.

Peirce highlighted a fact specific framework using the example of vault architectures where curators select the strategy and appoint allocators, while allocators move assets within those limits. In that setup, users interact with smart contracts, but curators still decide where capital can go and how much risk the vault can take.

CryptoSlate notes the potential stakes could extend beyond a single protocol, since Peirce said the consequences could reach the teams running a broader class of DeFi yield products if regulators interpret that human control as financial management.

While Peirce placed vaults on a spectrum, CryptoSlate reports her statement did not name Morpho and was not a Commission rule, order, or enforcement action, and she said any legal result would depend on the structure and activities of a particular vault.

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