S&P Global brings risk assessments to growing crypto lending vault sector
S&P Global Ratings introduced a framework to assess digital asset lending vault risks across six areas: portfolio credit quality, liquidity mismatch, curator, blockchain, protocol, and security and governance. The assessments will focus on potential investor losses, not yields, and will not be credit ratings. S&P says a serious weakness in any area can limit an overall assessment. Deposits in these vaults reached about $10 billion in September, compared with $1.5 billion two years earlier; S&P has not yet named the vaults it will assess. The framework arrives as vault products expand across crypto platforms and tokenized securities. Risks include an August exploit that cost Term Finance an estimated $8.5 million. In the US, regulators have also warned that some vault structures may fall under securities or investment laws.
