Aave, Kamino and Veda Hand SEC a DeFi Lending Playbook

Aave Labs wants the SEC to put it in writing: DeFi lending isn't a securities business. The company filed a confidential legal framework with the agency alongside the Kamino Foundation and Veda Tech Labs Inc., and asked for a sit-down with SEC staff. The submission landed on October 26, 2026, aimed at the SEC's Crypto Task Force and its Division of Corporation Finance.

The pitch covers two products: decentralized lending protocols and non-custodial vaults, where users keep their own keys and their own funds. The groups ran both through four pillars of US securities law — the Howey test for investment contracts, the Reves analysis for debt-like instruments, the Investment Company Act of 1940 and the Investment Advisers Act. Their verdict on all four: no investment contracts, nothing Reves can grab, and no advisory relationship that would trigger custody rules.

The whole argument rests on ownership and control. The groups say protocol users hold onto both from start to finish. Aave Labs added two more points: the protocols never promise repayment, and decisions flow through transparent, community-led governance instead of a traditional investment manager calling the shots.

A public summary of the framework went out between November 2 and 3, 2026, while the full filing stayed under wraps. There's real money on the line — more than $50 billion in digital assets was reported across lending protocol markets by October 2026. The filing also builds on earlier Aave Labs engagement with the agency, and follows the December 2025 close of an SEC probe into the Aave protocol that had been running since around 2021 and ended without an enforcement recommendation.

Dragging Kamino and Veda into the room changes the shape of it. What could have read as one protocol begging for cover now looks more like a sector-wide position.

Worth keeping straight: this is a legal argument from interested parties, not an SEC ruling, guidance or approval. The agency hasn't signed off on any of it, and the groups have only asked for a meeting. If regulators did engage with the reasoning, the research behind the filing suggests less regulatory uncertainty could pull liquidity and institutional money into a market already north of $50 billion — and hand other lending protocols a template to test their own designs against the same four frameworks.