DeFi vault regulation splits Aave, Kamino and Veda from Morpho: Details

The DeFi industry is split on the best way for the U.S. SEC to regulate popular yield-generating crypto vaults. On Tuesday, the 3rd of November, Aave, Solana-based Kamino, and crypto vault infrastructure firm Veda wrote to the SEC on how vaults should be treated. The trio said, Our argument: securities regulation should follow the rights, obligations, and powers an onchain arrangement actually creates. Who owns the assets? Who promises repayment? Who exercises control? According to the trio, human discretion or active management by a DAO on crypto vaults should not automatically trigger the SEC’s securities laws. The lending protocols contend that, provided users still own assets and can withdraw them at will, such vaults can be deemed non-custodial.

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