The U.S. Securities and Exchange Commission (SEC) has signaled that one of decentralized finance’s fast-growing sectors could face greater regulatory scrutiny.

In a statement Wednesday, Commissioner Hester Peirce said crypto vaults and onchain lending strategies may fall under federal securities laws depending on how they are structured and managed.

While many crypto activities lie outside the SEC’s jurisdiction, she cautioned that moving them onto blockchain rails does not automatically change their legal status.

“Tokenized securities are still securities,” Peirce said, echoing her earlier remarks. “That principle holds for vaults.”

“If you do headstands, backflips and other gymnastics to read the law so that it does not apply to crypto assets and activities that are well within the scope of the federal securities laws, you will have a painful fall,” she added.

Her comments rippled across the crypto market. MORPHO$1.9604, one of the largest providers of vault infrastructure, fell roughly 5% following the statement, underperforming the broader crypto market.

Vaults have become one of DeFi’s fastest-growing products by allowing users to deposit crypto into smart contracts that automatically allocate capital across lending markets and other yield-generating strategies. Users receive returns while the vault’s rules, or in some cases professional managers known as vault curators, determine where funds are deployed.

“Today’s draft is a meaningful step toward the Senate vote on the Clarity Act we’ve been calling for,” said Digital Chamber CEO Cody Carbone in a statement. “We’re encouraged, and we’re ready to keep working until the bill reaches the president’s desk.”

One thing that may land as a significant relief for the decentralized finance (DeFi) corner of the industry is that the section known as the Blockchain Regulatory Certainty Act remains intact, meaning developers that don’t control users’ assets won’t be treated under the regulatory regime as “money transmitters,” with all the compliance burdens that would come with that. The draft also includes new language on federal preemption, provisional registration procedures and commodity pool operators — all still being furiously studied by the experts.

Miller Whitehouse-Levine, the CEO of Solana Policy Institute, outlined a few points in the bill, including that it would provide a “clear regulatory treatment for tokens and token fundraising, establish regulation for exchanges, give financial institutions the green light to use public blockchains, direct the federal agencies to create a regulatory pathway for tokenized securities and futures markets onchain and, most critically, establish robust consumer and developer protections.”

Last week, several Senate Democrats gathered for a press conference explaining their opposition to the Clarity Act, and warning of the crypto sector’s rapidly growing influence in Washington.

• XRP holds above the $1.13 breakout level.
• Whale selling drops as large holders increase accumulation.
• XRPL daily payments surpass 500,000 transactions.

XRP recently moved above the $1.13 level, a price zone that many traders had been watching as a major resistance area.

Holding above this level has shifted attention toward higher resistance levels, with market analyst Dark Defender identifying $1.22, or approximately $1.2269, as the next upside target using Elliott Wave analysis and Fibonacci extension levels.

XRP a clear break and expected to complete the 5 Wave structure we set on 30 Jun. I will add it as a second post for you to check!

$1.13 is the KEY. $1.22 is in sight. (NFA)

Enjoy your day!#XRPArmy #ripple pic.twitter.com/gPCyQQgfzO

— Dark Defender (@DefendDark) July 21, 2026

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Dark Defender’s analysis suggests that maintaining support above the breakout zone remains critical for the bullish structure to stay intact.

A sustained move above the current range would strengthen the technical setup, while a drop back below the breakout level could trigger another test of lower support.

Golden cross and breakout strengthen XRP’s technical picture

Another development attracting attention is the appearance of a golden cross, a chart pattern that occurs when a shorter-term moving average crosses above a longer-term moving average.

This signal has historically been associated with improving medium-term momentum.

Although a golden cross does not guarantee higher prices, it is widely regarded as one of the stronger confirmation signals when it appears alongside a confirmed breakout.

The combination of a resistance breakout and a golden cross has created a stronger technical backdrop than either signal would have provided independently.

Focus is now on whether XRP can build enough momentum to challenge the next resistance area identified by Dark Defender.

Whale accumulation replaces heavy selling pressure

On-chain data has also shown a noticeable change in the behaviour of large XRP holders.

Recent blockchain metrics indicate that whale selling pressure has dropped to its lowest level recorded since 2025.

Earlier in the year, hundreds of millions of XRP were regularly transferred by large holders to exchanges, increasing potential selling pressure.

Those exchange inflows have since declined sharply, suggesting that major holders are becoming less active sellers.

At the same time, blockchain data points to accelerating whale accumulation, indicating that some large investors are increasing their XRP positions instead of reducing them.

Normally, buying activity from large wallets reduces immediate selling pressure on the market.

Even so, whale accumulation alone does not determine future price direction. A sustained rally still depends on broader market demand and continued buying interest across both institutional and retail participants.

XRPL network activity reaches important milestone

Beyond price action, the XRP Ledger has also recorded stronger network usage.

Daily payment activity on the XRPL recently climbed above 500,000 transactions, marking one of the strongest levels of network utilisation in recent months.

Payment volume is one of the key indicators used to measure blockchain activity because it reflects how frequently the network is being used for transfers and settlement.

The increase in payment activity comes alongside growing development across the XRPL ecosystem, including projects focused on integrating artificial intelligence with blockchain infrastructure.

While these initiatives are still developing, they point to broader activity taking place beyond simple token trading.

SEC Commissioner Hester Peirce said crypto vaults and onchain lending products may fall under US securities laws, urging developers to assess whether products that actively manage user assets require regulatory compliance.

In a statement published Wednesday, Peirce said crypto vaults and lending strategies that involve discretionary decisions, including allocating assets, selecting yield-generating activities, setting lending terms and determining liquidation thresholds, may fall within the scope of federal securities laws depending on their structure and operation.

She said some vaults could be treated as securities offerings or investment companies, while parties managing vault allocations or lending parameters could also trigger investment adviser requirements.

Peirce said that some onchain loans may also qualify as securities depending on how they are structured, distributed and used.

“Moving activities that fall within the scope of the federal securities laws onchain, as a general matter, does not take those activities outside the scope of the laws the Commission administers,” Peirce said.

Peirce urged developers and operators to consult the SEC if their products may fall within its jurisdiction and invited feedback on how existing rules could better accommodate onchain finance.

Related: SEC sues Mining Automatic and founder over alleged $22M crypto mining scheme

Crypto vaults grow as regulators scrutinize onchain yield products

Crypto vaults pool user assets into onchain strategies designed to generate yield through lending markets, staking or liquidity pools. Their use has expanded this year as companies package sophisticated DeFi strategies into products aimed at both retail and institutional investors.

In April, Sentora opened its Smart Yield platform to the public, allowing users to compare and access DeFi vaults based on strategy, yield and risk metrics. Earlier, Wallet in Telegram launched self-custodial Bitcoin (BTC), Ether (ETH) and USDT (USDT) vaults that provide automated yield generation without requiring users to transfer assets to a centralized custodian.

Kraken followed in May with a Bitcoin vault offering up to 2.5% variable APY by deploying wrapped Bitcoin across decentralized lending protocols including Aave and Morpho. Rewards are paid in Bitcoin and fluctuate based on borrowing demand in the underlying markets.

The products have also exposed users to technical risks. In December, decentralized finance protocol Yearn disclosed a roughly $9 million exploit affecting its legacy yETH yield vault, though the protocol said its V2 and V3 vaults were not effected.

If crypto vaults were to fall under federal securities laws, their operators could be required to register with the SEC or qualify for exemptions while complying with disclosure and other regulatory requirements.

Source: Yearnfi

Magazine: The digital euro: Surveillance money, or a better alternative to cash?

The White House has accused Moonshot AI of secretly using Anthropic’s technology to develop Kimi K3, days after the Chinese model took first place on the Frontend Code Arena.

Michael Kratsios, director of the White House Office of Science and Technology Policy, alleged in a July 22 X post that the U.S. government had obtained information linking K3’s development to Anthropic’s Fable model. Kratsios did not publish technical records or other evidence with his claims.

According to the White House official, Moonshot built an internal platform capable of extracting knowledge from U.S. models through large-scale distillation. Kratsios alleged that the system allowed the Beijing-based company to change access methods quickly, making its activity harder for American developers to detect.

“We have information that Moonshot AI distilled Anthropic’s Fable for the development of its K3 model.”

Model distillation typically involves training a smaller or less expensive system with responses produced by a more powerful model. Kratsios acknowledged that developers can use the technique to create efficient products, but he accused Moonshot of applying it secretly and on an industrial scale.

Moonshot AI had not issued a public response to Kratsios’ allegations at the time of writing. The White House also had not released supporting material that would allow independent researchers to assess whether K3 incorporated proprietary Anthropic technology.

Kimi K3’s benchmark win raises scrutiny

Kratsios’ accusations arrived less than a week after Kimi K3 overtook several U.S. systems on a closely watched coding benchmark. As reported by crypto.news on July 17, the model reached first place on the Frontend Code Arena while performing close to leading products in several other evaluations.

The preliminary Frontend Code Arena ranking gave K3 a score of 1,679, placing it ahead of Anthropic’s Claude Fable 5 at 1,631. Moonshot has presented K3 as a 2.8-trillion-parameter open-weight model, although its full weights are scheduled for release on July 27, leaving outside researchers unable to complete a full technical review before then.

Following the benchmark result, former White House crypto and AI czar David Sacks warned that heavy U.S. regulation could help Chinese laboratories close the performance gap. Sacks described K3’s result as concerning because the model also ranked near the frontier across other tests.

In Sacks’ view, federal approval requirements, restrictions on data center construction and separate state rules could slow U.S. developers without limiting Chinese competitors. He argued that America became a technology leader during the internet era by allowing companies to build products without first securing government permission.

Kratsios drew a different line between normal development and the conduct he attributed to Moonshot. While supporting “free and fair” AI development, the White House official argued that covert distillation designed to obtain protected U.S. technology could not be treated as ordinary competition.

“Large-scale, covert industrial distillation aimed at stealing proprietary U.S. technology and undermining American research is unacceptable.”

During a Fox Business interview, Bessent warned that the United States could sanction overseas AI companies found to have stolen American intellectual property. The New York Post separately reported that Anthropic, OpenAI and Google had raised concerns about Chinese laboratories using unauthorized model distillation.

AI competition intensifies across capital and talent

Alongside the model dispute, Chinese AI companies have continued seeking the capital needed to compete with well-funded U.S. laboratories. DeepSeek has reportedly entered early discussions with investors about a funding round that could value the company at about $71 billion before the new capital is added.

DeepSeek’s previous external financing valued the startup at $7 billion before the investment and approximately $52 billion afterward. The company has also started early preparations for a possible initial public offering, with a domestic Chinese listing reportedly under consideration.

Competition for funding has developed alongside a fight for technical and entrepreneurial talent. During an appearance on the VALR podcast, Hyperliquid co-founder Jeff Yan argued that artificial intelligence’s rising social status was drawing promising young founders away from cryptocurrency and financial technology.

Yan urged entrepreneurs to judge industries by the problems they could solve rather than their public appeal. According to the Hyperliquid co-founder, rebuilding financial systems through on-chain markets still gives founders an opportunity to turn academic research into products that can operate at scale.

U.S. authorities have also been changing how American frontier models reach overseas users. Earlier in July, the Commerce Department lifted export restrictions covering Anthropic’s Fable 5 and Mythos 5, allowing the company to restore international access after adding safeguards.

Separately, Commerce Secretary Howard Lutnick granted around 100 selected businesses and government agencies limited access to Mythos 5 under specific controls, according to a letter sent to Anthropic co-founder Tom Brown. Those decisions have placed access to advanced American models at the center of Washington’s effort to protect domestic technology without slowing commercial adoption.

Moonshot’s benchmark lead and Kratsios’ allegations have now brought those competing goals into the same dispute. Sacks has presented K3 as evidence that strict domestic rules could weaken U.S. companies, while Kratsios has framed the model’s development as a possible case of proprietary technology being extracted through concealed access methods.