Plume Network Asks SEC Not To Regulate Crypto Vault Protocols

Plume Network met with the SEC’s Crypto Task Force on September 22 to propose a function-based regulatory framework for onchain vault protocols. The proposal argues that U.S. securities laws should apply based on specific activities—such as investment discretion and asset selection—rather than the underlying blockchain technology or the vault label itself. Plume suggests dividing the vault ecosystem into four distinct roles: protocol developer, curator, administrator, and token issuer. Under this model, immutable smart-contract developers providing infrastructure without custody or discretion would face different regulatory requirements than curators who actively manage strategies. Additionally, Plume advocated for SEC guidance on using distributed-ledger wallets for securityholder registration and embedding anti-money-laundering controls directly into tokenized fund interests. The company also requested rules to support hybrid fund structures that issue both conventional and tokenized share classes. While the SEC has not adopted these recommendations, the submission highlights a growing industry effort to define clear compliance pathways for RWA-focused Ethereum Layer 2 networks. This dialogue is critical for the RWA market as it seeks to reconcile decentralized vault mechanics with existing federal securities and investment-company regulations.