Peirce said onchain vaults and lending with active management still face SEC registration rules. The warning targets DeFi protocols that treat onchain activity as exempt.
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SEC Commissioner Hester Peirce warned on July 22 that moving crypto activity onchain does not erase its securities duties. She cautioned that vaults and lending strategies with active management can trigger registration requirements.
Peirce's remarks target a growing corner of decentralized finance where protocols offer yield through vaults that rebalance allocations or lend out deposited tokens. The commissioner said such structures risk falling under the Investment Company Act if they hold themselves out as investing in securities and are actively managed.
The warning echoes a long-standing SEC position that the label "DeFi" does not exempt a product from federal securities laws. Peirce, often seen as the agency's most crypto-friendly commissioner, made clear that operational form – onchain or off – does not change legal substance.
No formal rulemaking or enforcement action followed the statement. Peirce spoke at a blockchain policy event in Washington.
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