SEC Commissioner Hester Peirce: On-chain Treasuries and Lending Activities May Still Be Subject to Securities Law
SEC Commissioner Hester Peirce stated that although many crypto activities are not bound by federal securities laws, transferring securities-like activities to on-chain does not typically change their legal status. Peirce noted that if treasury operators are responsible for asset allocation, yield strategy selection, or decision-making, their actions may constitute a joint enterprise or fall under investment company regulations; managers setting interest rates, LTV, and liquidation parameters in on-chain lending must also assess the applicability of securities laws. In market mechanisms, DeFi project parties and protocol developers become the main compliant buyers, directing funds towards transparent projects with clear legal attributes, benefiting institutional participants, while projects in gray areas face pressure, overall accelerating crypto innovation and regulatory communication, promoting efficient capital allocation within a compliant framework. Source: Public information
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Hester Peirce has long been viewed as a crypto-friendly commissioner, having publicly criticized the SEC's overregulation and advocated for sandbox mechanisms, while still insisting on leaving space for industry development after the FTX incident. In terms of capital pathways, the SEC guides project parties to proactively communicate through commissioner statements, aiming to balance investor protection with innovation, shifting resources from adversarial enforcement to rule clarification, making it easier for compliant projects to attract institutional capital. Drawing an analogy to the historical establishment of boundaries between commodity futures and securities regulation, the current crypto market is in a transitional phase of clarifying the applicability of securities laws, with Peirce's stance representing a pragmatic voice within the regulatory framework. Essentially, this reflects regulatory change: determining the legal attributes of on-chain activities drives the construction of compliance infrastructure, clarifying the boundaries of "efforts to profit" and managerial responsibilities, reducing uncertainty, and allowing capital to concentrate from gray DeFi to regulated transparent protocols, thus achieving a dynamic balance between protection and capital formation.