S&P brings ratings-style scrutiny to $10 billion crypto vault market as $6 million Base incident exposes risks

S&P Global is bringing ratings-style risk assessments to crypto lending vaults as the fast-growing market confronts fresh security failures.The ratings firm launched its Vault Risk Assessment framework on Oct. 4, creating a standardized approach for comparing the likelihood that investors suffer impairment in lending vaults. Deposits in the products reached about $10 billion in September, up from $1.5 billion two years earlier, according to S&P.The launch came the same day blockchain security firm CertiK flagged suspicious movements involving an unnamed vault on Coinbase-backed Base network.According to the blockchain security firm, the newly deployed proxy borrowed about 1,783 aBaswstETH, worth roughly $6 million, from the vault before redeeming the tokens through Aave for around 1,783 wstETH.The incident did not exploit Aave itself. Instead, it highlighted a problem that grows more relevant as vaults become more popular: investors can be exposed to risks introduced by the contracts, permissions, and managers between their deposits and the underlying lending protocols.That distinction sits at the heart of S&P's new framework. Vaults pool investor assets and allocate th...