Plume Urges SEC to Focus Vault Rules on Curators and Token Issuers

SEC Commissioner Hester M. Peirce said vaults differ by structure and activity in July; Plume now wants the SEC to assess vault oversight by the roles people perform.

Peirce described vaults ranging from those that use immutable code to allocate assets to those where a person directs allocations. She said securities-law questions depend on each vault’s structure and activity. “Vaults are not uniform,” Peirce said.

Plume submitted its proposal to the SEC’s Crypto Task Force on Sept. 21. It identifies four roles: protocol developer, curator, administrator and token issuer. Plume argues that oversight may apply to curators and token issuers, while neutral software developers and administrators should not be regulated solely for those functions.

Curators choose yield strategies and may set rates, loan-to-value limits and liquidation thresholds. Administrators handle tasks such as subscriptions, redemptions and wallet screening. Plume says regulators should consider the assets held, the discretion exercised, compensation and whether investors are in the United States or offshore.

Plume General Counsel Salman Banaei described the proposed approach this way: “Regulation should attach by function, not by the label ‘vault.’” The proposal leaves room for separate requirements when an administrator performs functions such as transfer agency or custody. It does not establish a new rule; it asks regulators to clarify how existing requirements apply to different vault roles and structures.

Plume’s recommendations also address registered funds and tokenized shares. The company wants clearer custody rules for funds using onchain vaults, the option to offer traditional and tokenized share classes in one fund, and secondary markets for tokenized fund shares. It also recommends modernizing transfer-agent rules and adding anti-money-laundering controls at the asset level. Together, the proposals cover custody, trading and compliance as well as who operates a vault.

The proposal fits Plume’s broader work on tokenized fund products. The company launched a vault tied to Fidelity Total Bond ETF on Oct. 5.

SEC staff met with Plume representatives on Sept. 22, the day after the proposal was submitted. Proposed transfer-agent rules were among the meeting topics.