The Crypto Council for Innovation has assembled a coalition of heavyweight crypto firms with a singular mission: figure out the rules for vaults before regulators write them first.
The Vault Coalition, announced on June 5 during the Vault Summit, brings together Galaxy, Morpho, a16z crypto, the Avalanche Policy Coalition, BitGo, and Sharplink to tackle the legal and regulatory ambiguity surrounding one of DeFi’s fastest-growing primitives. The effort is led by CCI, a policy advocacy group founded in 2021 and headed by CEO Ji Hun Kim.
What vaults actually are, and why they need their own coalition
Think of a vault like a pooled investment vehicle, except it runs on smart contracts instead of spreadsheets and fund administrators. Users deposit digital assets into a vault, which deploys those assets across various strategies to generate yield. In return, depositors receive transferable tokens representing their proportional share of the pool.
The legal status of these vaults in the US remains genuinely unclear. Are the receipt tokens securities? Is the vault operator a custodian? Does deploying pooled assets to earn yield make the smart contract an investment company? These are not hypothetical questions. They’re the exact kind of ambiguity that has historically triggered enforcement actions from the SEC.
Three pillars of the coalition’s approach
The Vault Coalition has organized its work around three focus areas, each designed to build a credible case before regulators come knocking.
First, the coalition plans to engage outside legal counsel for comprehensive legal analysis of vault structures. This means commissioning detailed opinions on how existing securities laws, custody rules, and investment company regulations apply to vaults as they actually operate today.
Second, the group intends to develop what it calls “market-informed policy principles.” The goal is to create consensus-driven frameworks that reflect how vaults function in practice, covering everything from custody and control to the mechanics of yield generation.
Third, the coalition will pursue direct engagement with US regulators. Rather than waiting for a notice of proposed rulemaking or, worse, an enforcement action to define the boundaries, the group wants to proactively shape the conversation.
Why this matters for investors
Capital allocators at banks, asset managers, and family offices face a fundamental problem: they can’t deploy meaningful capital into structures where the legal classification remains unresolved.
The composition of the coalition itself signals how seriously the industry is taking this. Galaxy operates one of the largest institutional trading desks in crypto. BitGo is a regulated custodian. a16z crypto manages billions in venture capital. These are not fringe players hoping to dodge oversight. They’re firms with existing regulatory relationships that have a direct financial interest in getting the rules right.
There’s a real risk that regulators could classify vault tokens as securities, which would impose registration requirements, restrict who can participate, and potentially make many existing vault structures non-compliant. The coalition’s preemptive approach is designed to minimize that risk by presenting regulators with well-reasoned legal analysis and industry consensus before any rules are finalized.