Aave and other institutions and CCI are at odds over regulatory boundaries for crypto vaults

TechFlow report, November 3: According to legal analyses published by Aave Labs and other institutions, the crypto industry has differing views on whether U.S. securities laws apply to non-custodial vaults. Aave Labs, Kamino Foundation and Veda Tech Labs said in a report submitted to the U.S. Securities and Exchange Commission (SEC) that, under the specific architectures analyzed, vault strategies actively selected by managers do not necessarily constitute a joint investment venture or investment company.

By comparison, the framework proposed by the Crypto Council for Innovation (CCI) and members including Bitwise, Galaxy and Morpho emphasizes the degree of control individuals have over investment decisions and assets. Aave and other institutions also noted that vault managers providing compensated investment advice on securities may still be subject to the Investment Advisers Act; their conclusions depend on specific designs and rights arrangements, and are not SEC regulatory conclusions.

Source: TechFlow