Crypto industry organization Crypto Council for Innovation leads submission of 238-page report calling on the U.S. SEC to clarify regulatory boundaries for on-chain vaults

TechFlow news: On October 29, according to Crypto in America, crypto industry organization Crypto Council for Innovation (CCI) and members including Bitwise, Galaxy Digital, and Morpho submitted a 238-page report to the U.S. Securities and Exchange Commission (SEC), calling on regulators to clarify how existing securities laws apply to on-chain vaults (Vaults) and to develop a differentiated regulatory framework based on the degree of control human operators have over user assets and investment decisions.

CCI believes regulators should focus on vault operators' discretion over investment decisions: vaults that automatically execute lending strategies according to fixed rules and products that allow operators to choose investment targets, adjust lending terms, or reallocate funds should be subject to different regulatory standards. The greater the operator's control over investment decisions, the stronger the case for securities regulation of the relevant product. For on-chain vaults that may be classified as investment companies, CCI recommends that the SEC reference the development path of ETFs, first approving regulatory exemptions on a case-by-case basis and then considering unified rules based on industry development.

Source: TechFlow