The DeFi Lending Vault Securities Dispute: Aave and Morpho Take Opposing Positions
Aave Labs, Kamino Foundation, and Veda Tech Labs have proposed a legal framework arguing that decentralized lending protocols are not securities. The Crypto Council for Innovation (CCI), however, argues that when management authority reaches a certain level, a vault constitutes a security. The two filings agree on overcollateralized lending; their disagreement centers on managers’ rebalancing activities.
Aave Labs, Kamino Foundation, and Veda Tech Labs have proposed a legal framework arguing that decentralized lending protocols are not securities. The Crypto Council for Innovation (CCI), however, argues that when management authority reaches a certain level, a vault constitutes a security. The two filings agree on overcollateralized lending; their disagreement centers on managers’ rebalancing activities.