Crypto Council hands the SEC a 238-page framework for regulating crypto vaults

The Crypto Council for Innovation (CCI) has given the US Securities and Exchange Commission some reading material. The group submitted a roughly 238-page framework on how crypto vaults may fit within federal securities laws.

The document is titled “Under Control: A Framework for Applying the Federal Securities Laws to Crypto Vaults.” It runs across four volumes.

Vaults now hold approximately $131 billion in assets, according to S&P Global data.

What the framework actually proposes

CCI delivered the report to the SEC on October 28–29, 2026. Its subject is smart contract-based vaults built to pool digital assets.

The paper examines three pillars of US securities law: the Securities Act of 1933, the Investment Company Act of 1940, and the Investment Advisers Act of 1940.

Those are the statutes that determine when something is a security, when a pool counts as an investment fund, and when someone steering money owes regulators paperwork. Rather than slotting every vault into one of those boxes, the report argues for a more nuanced approach.

The centerpiece is what CCI calls a “Control Framework.” It measures how much human control curators or operators keep, compared with how much the smart contract code handles automatically.

The framework breaks that agent-side control into four dimensions, abbreviated as MEGD:

Mandate: who sets the vault’s strategy and goals.

Execution: who carries out the moves.

Governance: who can change the rules.

Disposition: who decides what ultimately happens to the assets.

The report’s core recommendation is that regulatory treatment should be calibrated to a vault’s actual design and control. Calling something a “vault” should not, by itself, decide how the law treats it.

Why the SEC asked in the first place

This submission was not unsolicited. It answers a call for industry feedback in a July 22, 2026 statement from Hester Peirce, which invited comments on vaults and lending strategies.

The Vault Coalition is positioning the report as a significant resource for the SEC’s rulemaking process. Its members include Bitwise, Galaxy Digital, and Morpho.

What this means for vault operators and investors

The immediate significance is that the SEC now has a structured way to look at vaults under existing law.

For firms building vaults, the Control Framework offers something like a self-assessment checklist. If regulators adopt this lens, operators could map their products against the four MEGD dimensions and gauge their likely obligations before launch.

Vaults where curators hold meaningful discretion may find themselves looking a lot like investment funds or advisers. Highly automated vaults may have a stronger argument that they function more like software than like a fund manager.

Investors should watch for whether the SEC responds publicly to the submission or incorporates its ideas into formal rulemaking. Vaults and lending are often intertwined, so any treatment of one will likely ripple into the other.