Michael Bassett, Chief Legal Officer (CLO) of Sentora, an institutional-only DeFi platform, evaluated that the remarks by Hester Peirce, Commissioner of the U.S. Securities and Exchange Commission (SEC), regarding crypto vaults and on-chain lending are not a sign of increased regulation on DeFi, but rather a signal that discussions about its integration into the mainstream financial system are gaining momentum. He explained, "This reaffirms the existing position that being implemented on-chain does not exempt it from federal securities laws. It is important that the SEC has publicly acknowledged the need for separate regulatory discussions on vaults and on-chain asset management strategies. The SEC wants to establish a regulatory framework that satisfies both innovation and investor protection through dialogue with the industry. This is not a new regulation or enforcement action, but a meaningful message showing the future direction of regulation." Previously, Commissioner Hester Peirce stated that simply depositing crypto assets on-chain does not automatically exempt related activities from federal securities laws.
