Aave Labs, Veda, and Kamino have published a summary of the framework for decentralized lending and non-custodial vaults they submitted to the SEC.
They write that there is no counterparty at the protocol layer promising to repay users. Users continue to hold shares in vaults, curator powers are constrained by code, and assets cannot be withdrawn unilaterally. If a discretionary curator provides investment advice involving securities, fiduciary duties may still apply; that is a question of the curator’s status as an adviser, while whether the vault itself is an issuer depends on the facts and structure. The submission does not seek an exemption; it makes its case under current law.
This is the industry’s position, and the SEC has not yet ruled on it. The most practical takeaway for retail users: read the product documentation and check who can move your assets and whether there is a way to withdraw them unilaterally.
$AAVE
They write that there is no counterparty at the protocol layer promising to repay users. Users continue to hold shares in vaults, curator powers are constrained by code, and assets cannot be withdrawn unilaterally. If a discretionary curator provides investment advice involving securities, fiduciary duties may still apply; that is a question of the curator’s status as an adviser, while whether the vault itself is an issuer depends on the facts and structure. The submission does not seek an exemption; it makes its case under current law.
This is the industry’s position, and the SEC has not yet ruled on it. The most practical takeaway for retail users: read the product documentation and check who can move your assets and whether there is a way to withdraw them unilaterally.
$AAVE