Funds Held in Crypto Vaults Top $10 Billion Amid Heightened Regulatory Scrutiny

• The amount of funds in crypto vaults rose from $4 billion at the start of 2025 to more than $10 billion, FT said.
• The SEC and ESMA are considering whether to treat crypto vaults and their curators like traditional investment funds to protect investors.

The amount of funds in crypto vaults has topped $10 billion as investors look for higher yields on stablecoins. At the same time, the segment’s growth has drawn the attention of US and European regulators due to risks tied to lending in decentralized finance (DeFi). Financial Times reported this, citing analytics group Blockworks.

At the start of 2025, about $4 billion was held in such vaults. They allow digital asset holders to allocate tokens under a chosen strategy and earn yield, including by lending to traders, the statement said.

How Crypto Vaults Work

The report says crypto vaults use smart contracts to manage assets without traditional intermediaries. At the same time, each vault has a curator — similar to a fund manager — who selects the strategy, sets risk parameters, and charges a fee.

Typical strategies involve lending or staking tokens with yields of around 3–10%. Riskier options may offer more than 20%.

According to Steakhouse Financial co-founder Adrian Kachinero Vasiljevic, the main vault depositors include fintech companies with large stablecoin reserves, digital asset managers, and hedge funds. Steakhouse Financial is the largest vault curator, according to the publication.

Although these tools give investors more control over collateral, they can automatically liquidate positions if issues arise. This can amplify a market sell-off.

“In a stress scenario, things can change very quickly,” said Andrew O’Neill, head of digital asset analytics at S&P Global Ratings. 

He said problems in DeFi spread much faster than in traditional financial markets.

Kaiko’s head of digital assets research, Leopold Wenger, also called the segment risky. In his view, investors often focus on interest rates without understanding liquidity metrics and other risk parameters, even though the vaults’ operating terms are set out in open smart contracts.

SEC and ESMA Consider Regulation

In July, the U.S. Securities and Exchange Commission (SEC) said it is examining under what conditions crypto vaults could fall under securities laws.

SEC Commissioner Hester Peirce noted that vaults that hold securities or allocate assets for investment in them could meet the definition of an investment company. Some of them may also operate similarly to unit investment trusts.

In September, the European Securities and Markets Authority (ESMA) proposed regulating the activities of intermediaries that facilitate access to DeFi services. As ESMA explained to the Financial Times, these proposals could extend to lending vaults if access to them is provided by crypto-asset service providers.

Jonathan Galea, a lawyer at Cahill Gordon & Reindel, noted that curators who continuously adjust strategy parameters and oversee asset flows could be viewed as analogs of traditional fund managers. In that case, the relevant regulatory requirements could apply to them.

Wenger of Kaiko called a potential shift toward regulated activity one of the biggest risks for curators, since a significant portion of this segment still operates without dedicated oversight.

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Сообщение Funds Held in Crypto Vaults Top $10 Billion Amid Heightened Regulatory Scrutiny появились сначала на INCRYPTED.