S&P Global Brings TradFi Risk Grades to $10 Billion Crypto Lending Vaults

Key Summary

S&P Global has launched the Vault Risk Assessment (VRA) to grade crypto lending vaults, which now hold approximately $10 billion in deposits. The ratings agency assesses six areas of risk, including portfolio credit quality, liquidity mismatches, and vault security and governance. The VRA provides a forward-looking view of potential losses for investors, distinct from credit ratings. This move follows S&P's expansion into digital assets, including acquiring auditor OpenZeppelin and issuing credit ratings for DeFi protocols. The VRA aims to address uneven reporting standards and potential regulatory scrutiny, potentially making crypto lending vaults more attractive to traditional financial institutions.