CTF Written Submission

Injective Labs Inc.

Oct. 29, 2025
  • DeFi credit protocols that are non-custodial, over-collateralized, governed by open-source code, and not used for capital raising do not constitute investment contracts under Howey or notes under Reves, and thus fall outside federal securities laws.
  • DeFi lending transactions lack the essential hallmarks of securities: there is no common enterprise, no reliance on managerial efforts of others, and the transaction is a loan with expectation of interest, not profits.
  • DeFi lending protocols operate as automated, non-custodial systems facilitating credit intermediation, not capital formation, and forcing them into securities regulation would be a category error with negative consequences for innovation.

Last Reviewed or Updated: Nov. 13, 2025