On Nov. 3, Veda, Aave Labs and Kamino Foundation published a summary of a legal framework on how U.S. federal securities laws apply to decentralized lending protocols and non-custodial vaults. According to ChainCatcher, the three organizations submitted a more detailed version to the U.S. Securities and Exchange Commission on Oct. 26 and requested discussions with agency staff; the full submission remains confidential.

Veda said the framework examines how securities laws should apply when financial activities traditionally performed by intermediaries are carried out through smart contracts, with ownership, control and decision-making distributed among different parties. It argues that regulation should reflect the rights, obligations and authority established by an arrangement, including who owns assets, bears obligations and exercises discretion. Shared infrastructure, receipt tokens or discretionary service providers do not alone determine those factors.

The document analyzes the Howey investment-contract test, the Reves test for notes, the Investment Company Act of 1940 and the Investment Advisers Act of 1940. It concludes that the protocols and vault arrangements examined do not constitute investment contracts or notes, that the vaults are not investment companies, and that compensated investment discretion does not necessarily amount to custody of client assets. Veda noted that the analysis depends on the specific architecture, contractual arrangements and allocation of rights and authority; changes to ownership, repayment commitments, discretion or redemption restrictions could affect the conclusions.

The submission does not seek an exemption, safe harbor or separate regulatory framework for decentralized finance. Instead, it asks the SEC to apply existing securities laws and recognize distinctions already made in law among activities such as issuance, investment management and custody. Veda said the document is for informational purposes only, is not legal advice, and has not been endorsed by the SEC. Veda was founded in 2024 and completed an $18 million funding round led by CoinFund in June 2025, according to RootData and Veda’s public materials.