# Crypto Innovation Council Urges SEC to Weigh Operator Control

By Riza Dagoc

Canonical URL: https://www.tokenpost.com/news/regulation/43719
Published: 2026-10-29T17:24:55.000Z
Updated: 2026-10-29T17:24:55.000Z
Section: Regulation

> The 238-page report also recommends case-by-case exemptions for some vaults and clearer rules for adviser registration and custody.

The Crypto Innovation Council (CCI), joined by Bitwise, Galaxy Digital and Morpho, is urging the Securities and Exchange Commission to weigh onchain vault operators’ actual control over investor assets when applying securities laws.

In a 238-page report submitted to the SEC, CCI argues that operator discretion is central to the analysis. The council points to decisions about investments, lending terms and fund movements, saying greater operator freedom in those areas strengthens the case for securities oversight.

For vaults that meet the definition of investment companies, CCI recommends case-by-case exemptions before broader rules are considered. It cites the exchange-traded fund regulatory approach as a model for considering exemptions individually before wider rules.

The council also recommends clarifying when vault operators must register as investment advisers and how custody rules should apply when smart contracts manage assets. The proposals address securities oversight, adviser registration and custody treatment for onchain vaults.

Whether the SEC will adopt the recommendations is unclear.