Key Highlights
- SEC Crypto Task Force staff met Plume Network representatives on September 22 to discuss approaches to crypto asset regulation.
- Plume proposed that securities regulation focus on vault curators and vault token issuers rather than neutral protocol developers and administrators.
- The company also asked the SEC to clarify onchain custody, tokenized fund trading, transfer-agent rules and AML controls for tokenized fund interests.
The U.S. Securities and Exchange Commission’s Crypto Task Force met with representatives of Plume Network on September 22, with the discussion focusing on approaches to regulating crypto assets and onchain vault structures.
The SEC’s Crypto Task Force meeting log confirms the September 22 meeting, while the memorandum says Plume representatives supplied documents that were discussed with Task Force staff.
Those materials outline Plume’s proposed regulatory framework for crypto vaults, arguing that U.S. rules should attach to specific activities within a vault rather than to the technology or the “vault” label itself. The proposal was submitted by Plume General Counsel Salman Banaei on September 21.
The SEC has not adopted Plume’s recommendations. The agency notes that Crypto Task Force submissions are published without modification and do not necessarily represent the views of the Task Force or the SEC.
Plume Wants Regulation to Follow the Vault Function
Plume divided the vault ecosystem into four separate roles: the vault protocol developer, vault curator, vault administrator and vault token issuer.
Under its proposal, an immutable protocol developer that provides self-executing smart-contract infrastructure without custody or investment discretion would be treated differently from a curator that selects strategies and determines parameters such as rates, loan-to-value ratios and liquidation thresholds.
Plume argued that the regulatory nexus should primarily sit with the curator and the vault token issuer when applicable, rather than automatically extending to the protocol developer or administrator.
The proposal follows a broader SEC discussion around crypto vaults. In July, SEC Commissioner Hester Peirce said moving financial activities onchain does not by itself remove them from federal securities laws. The Crypto Times previously reported that crypto vaults could fall under securities laws depending on how they are structured and managed.
Investment Adviser and Fund Rules Could Still Apply
Plume’s framework does not argue that crypto vaults should operate outside existing financial regulation.
Instead, its presentation says the applicable regulatory regime would depend on factors including investment discretion, compensation, the assets held by the portfolio and whether products are distributed publicly in the United States or offshore.
For example, Plume said an investment adviser analysis could apply when a curator is compensated for advising on or exercising discretion over a portfolio containing securities. Commodity trading adviser requirements could become relevant when the strategy involves futures or swaps rather than spot assets.
At the vehicle level, Plume said investment-company requirements can arise depending on the portfolio and how the product is offered, while commodity-pool rules can apply when pooled assets are used to trade commodity interests.
That approach would make the economic activity behind a vault more important than simply whether it uses blockchain infrastructure.
Plume Pushes SEC for Five Tokenized Fund Changes
Plume also used the meeting to press for changes to several rules affecting tokenized funds and onchain asset management.
The company asked the SEC to clarify how registered funds can use onchain vaults for custody, arguing that a structure combining transfer-agent controls and third-party attestations can provide custody safeguards.
It also proposed rules allowing a single fund to issue conventional, exchange-traded and tokenized share classes, along with changes that could support secondary trading of tokenized fund shares while retaining forward pricing for direct fund transactions.
Another proposal concerns transfer-agent records. Plume wants SEC rules to recognize distributed-ledger wallet addresses as valid securityholder registration and address entries.
For compliance, Plume proposed allowing asset-level anti-money-laundering controls to be embedded into tokenized fund interests, including freeze-and-seize functionality administered by regulated entities.
Plume Builds Case Around Nest and RWA Vaults
Plume develops the Nest onchain vault protocol and has been expanding its regulated real-world asset infrastructure.
Its presentation describes Plume as an Ethereum Layer 2 focused on RWAs, while Nest provides the smart-contract infrastructure for vault products. The company said Nest incorporates wallet screening and the ability to freeze or seize vault tokens where required by compliance controls.
Plume has already been building regulatory infrastructure around the model. The Crypto Times reported in May that Plume’s Kimber Digital Assets Bermuda received regulatory approval for its onchain vault business. Plume also previously registered a transfer-agent entity with the SEC for its tokenized securities activities.
The latest presentation says Plume is also working toward broker-dealer and alternative trading system memberships for parts of its tokenized securities infrastructure.
Crypto Vault Regulation Is Becoming a Bigger SEC Focus
Plume is not the first crypto company to bring the vault issue directly to the SEC.
Aave Labs met the Crypto Task Force in June to discuss the ERC-4626 vault standard and its implementation in Aave V4. The meeting covered tokenized vault mechanics, yield accrual and Aave’s lending architecture.
More recently, Steakhouse Financial met the SEC Crypto Task Force to discuss DeFi vault products and potential treatment under the Securities Act, Exchange Act, Advisers Act and Investment Company Act.
Plume’s submission takes the debate a step further by proposing where regulation should attach across the individual layers of a vault.
For now, the September 22 meeting represents an industry proposal rather than a new SEC rule, exemption or approval. Any shift toward Plume’s function-based model would require further regulatory action or guidance from the Commission.
