Crypto Vaults: US Regulatory Considerations

Posted on August 13, 2026

Crypto vaults are drawing regulatory attention, with a recent statement by SEC Commissioner Hester Peirce addressing the application of federal securities laws to these structures.

By Jenny Cieplak, Zachary Fallon, Laura Ferrell, Aaron Gilbride, Yvette D. Valdez, Stephen P. Wink, Adam Bruce Fovent, Haley Hohensee, Daphne Lambadariou, Ivan Pizeta, and Deric Behar

Key Points:

Crypto vaults exist on a broad spectrum, from fully automated smart contract allocations to discretionarily managed strategies, and their regulatory treatment depends on their specific design and operation.
The SEC maintains a facts and circumstances approach to determining whether a vault structure falls within the federal securities laws, and emphasizes that moving an activity on-chain does not, by itself, remove it from the SEC’s jurisdiction.
SEC Commissioner Peirce identified at least four potential points of contact between vaults and the federal securities laws: the investment contract analysis (Howey), the Reves note test for lending arrangements, investment company status under the Investment Company Act, and investment adviser status under the Investment Advisers Act.
While most of the regulatory focus has come from the SEC rather than the CFTC, practically speaking, vault operators and curators will also need to consider any attendant CFTC regulatory considerations if vault strategies involve derivatives or margined products.

In the crypto context, a vault generally refers to smart-contract-based infrastructure that allows users to deposit digital assets into an onchain arrangement that, depending on its design, either holds those assets or re-deploys them according to preset rules or parameters set by an external “curator.”

Depositors typically receive a receipt or vault token that reflects their proportional claim on the assets held or re-deployed through the vault and which can be used to redeem or withdraw that pro rata portion, subject to the vault’s terms. Crypto vaults typically aggregate deposits for execution by a single smart contract and re-deploy them into one or more decentralized finance (DeFi) strategies (such as on-chain lending). However, some vaults also permit their curators to trade assets on centralized exchanges or even away from the crypto-economy generally.

The curator role can vary significantly. A curator may configure the vault’s parameters, including eligible market lists, risk limits, fees, and allocation caps, in each case only within the permissions the vault’s smart contract enforces. In some models, the curator may appoint or work with an “allocator” that carries out allocations within bounds set by the curator.

At one end of the spectrum, a “set-and-forget” vault follows rules established at launch (such as deploying a particular asset into a particular lending strategy) with little or no ongoing discretion. By contrast, more active models can range widely, with some relying on algorithmic triggers or preset formulas that update allocations when stated conditions are met, and others involving more frequent monitoring and recalibration of parameters to adjust eligible markets, caps, or allocations over time. Changes are typically in response to changing market conditions rather than to any individual depositor’s circumstances, and may be subject to timelocks, governance, or other constraints that give depositors an opportunity to withdraw before a change takes effect.

The deployment strategy for deposited assets will vary in many ways depending on the vault. For example, assets may be lent to borrowers in underlying lending markets, staked or restaked to help secure a blockchain network, or supplied as liquidity to a trading pool to earn fees. Vault assets may also be allocated to tokenized real-world assets such as US Treasuries or private credit instruments, or used to engage in trading derivatives or other structured products.

The Peirce Statement

On July 22, 2026, SEC Commissioner Hester M. Peirce published a statement (“Headstands and Summervaults: A Statement on Crypto Vaults and Lending Strategies”) addressing how the federal securities laws may apply to crypto vaults and on-chain lending. She reaffirmed and applied to crypto vaults the broader principle underlying her July 2025 statement on tokenized securities (“Enchanting, but Not Magical: A Statement on the Tokenization of Securities”) in which she reminded market participants that “tokenized securities are still securities.” Regarding vaults, she similarly noted that “[m]oving activities that fall within the scope of the federal securities laws onchain, as a general matter, does not take those activities outside the scope of the laws the Commission administers.” And while the SEC and Staff issued a flurry of guidance in 2025 and 2026 clarifying which crypto assets and activities fall outside the securities laws,¹ Commissioner Peirce cautions that this clarity does not mean “the securities laws do not apply to any crypto assets or activities.”

Commissioner Peirce describes vaults as structures that “facilitate asset deployment by using smart contracts to allocate user assets to various yield-generating activities, including staking and lending.” Vaults, she noted, “are not uniform” and “fall along a spectrum from programmatic allocations determined solely by immutable smart contracts, to allocations at the sole discretion of another person or group of persons.” She acknowledges that the term “does not have a specific, widely understood definition” and that “features and strategies employed by vaults vary and are evolving rapidly.”

While praising innovative approaches to the deployment of assets, she cautions that “the promise will only be realized… if we grapple now with the intersection between these asset deployment tools and the federal securities laws.”

Of course, the statement is not a Commission rule, interpretive release, or staff guidance and reflects the views of a single Commissioner. It does not bind the Commission or its staff, and it creates no safe harbor or legal rights on which market participants may rely.

US Legal and Regulatory Considerations

As vaults evolve, the key US regulatory question is whether a vault’s structure and operation bring it within the federal securities and commodities laws.

Investment contract analysis (Howey): A vault in which users contribute capital in a passive manner as part of a common enterprise with a reasonable expectation of profits derived from the managerial or entrepreneurial efforts of a vault deployer or curator could constitute an investment contract, and therefore a security. The more initial and ongoing discretion a curator exercises over asset selection, reallocation, and risk parameters, the greater the likelihood that depositors will be viewed as passively relying on the efforts of others. Whether any given vault, or the curation services provided in respect of it, involves an investment contract remains a facts and circumstances determination.
Reves note test: On-chain lending arrangements facilitated by vaults or standalone lending strategies could, depending on the parties’ motivations, plan of distribution, and other relevant factors, bear the hallmarks of notes that are securities under the framework established in Reves v. Ernst & Young, 494 U.S. 56 (1990) (see this Latham blog post).
Investment Company Act considerations: A vault that holds or allocates assets to “investment securities” (including tokenized securities) could fall within the definition of an “investment company” within the meaning of the Investment Company Act of 1940 (Investment Company Act). That definition turns principally on whether the arrangement is, or holds itself out as being, engaged primarily in the business of investing, reinvesting, or trading in securities, or owns investment securities exceeding 40% of its total assets, excluding US government securities and cash items. Commissioner Peirce indicated that depending on the facts and circumstances, some vaults may resemble unit investment trusts, management investment companies (mutual funds), or other pooled investment vehicles.
Investment Advisers Act status considerations: Persons providing advice with respect to vault allocations into securities, including selecting yield-generating activities, may be viewed as exercising discretionary authority over depositors’ digital assets. According to Commissioner Peirce, the Investment Advisers Act of 1940 (Investment Advisers Act) may be implicated depending on the facts and circumstances. In addition, holding oneself out as an investment adviser (e.g., through marketing, public statements, or other representations) could independently trigger Investment Advisers Act regulation, regardless of the specific activities performed.
CFTC considerations: A vault strategy that involves trading in CFTC-regulated derivatives products — such as futures, options, swaps (including perpetual contracts), or certain leveraged or margined trading offerings — could implicate CFTC regulatory considerations. For example, although there is no current guidance on the point, such a vault could be characterized as a “commodity pool.”In such event and depending on the facts and circumstances, one or more parties that operate or solicit funds for the vault could qualify as a “commodity pool operator” and/or a curator or allocator could qualify as a “commodity trading advisor.” Status as such for CFTC regulatory purposes would require registration absent an applicable exemption.

In addition, there are potential sanctions issues:

If tokens are deposited into a vault by sanctioned persons, any identifiable operator of the vault could be viewed as violating sanctions laws administered and enforced by the Office of Foreign Assets Control (OFAC), and some or all of the property in the vault could be blocked as a result. Vaults that are designed to obscure user transactions are more vulnerable to these concerns, while vaults designed to block sanctioned addresses are less vulnerable.

None of the relevant regulators have issued formal rulemaking, no-action relief, or interpretive guidance specific to crypto vaults. Accordingly, market participants have reasoned by analogy from staff positions developed for earlier technologies and information services, none of which addresses on-chain vaults directly. As a result, the regulatory analysis remains the subject of uncertainty and must be considered on a case-by-case basis, grounded in the facts and circumstances of each vault’s design, assets, operations, and participant roles.

Conclusion

For US market participants, several practical considerations follow:

Conduct a thorough legal analysis before launch: Vault deployers, curators, and protocol developers should assess whether their vault’s specific design, strategy, assets, and governance model brings it within the perimeter of the federal securities and commodities laws and whether other federal or state laws are implicated.
Consider vault construction choices: The degree of human discretion, the nature of the assets deployed, the custody and control arrangements, and the marketing and distribution approach each bear on the analysis. A vault that is fully programmatic, governed by immutable code, and involves no managerial discretion presents a different case than a curated vault where a designated party actively selects yield strategies, reallocates capital, or has control over asset withdrawals. The custody boundary is often the organizing fact: whether any party can withdraw, redirect, or condition redemption of user assets, and whether emergency pause, guardian, or similar functions could be characterized as authority to obtain possession of those assets. A vault’s design features, such as timelocks, transparent governance processes, and non-custodial architecture, may also be relevant to such analysis.
Engage with regulators: The SEC has expressly invited market participants to initiate dialogue, and the CFTC has also been actively encouraging industry engagement and dialogue. Given the emphasis of agency leadership under the current administration on engagement over enforcement, the window for proactive consultation is open.
Consider how the CLARITY Act may affect vaults: As currently drafted, the CLARITY Act would not resolve the regulatory considerations at issue with DeFi vault strategies. Vault operators and curators should consider the effect of any market structure legislation on their vault strategies.
Monitor developments across regulatory regimes: Vault operators should continue tracking securities, commodities, sanctions, and other applicable frameworks as agency guidance, enforcement activity, and legislation evolve.

Follow this and other critical developments on Latham’s US Crypto Policy Tracker.