Crypto : SEC has Finally Moved Past Patchwork Laws

The SEC has just sent to the White House a reform project of the crypto custody rules. It is about determining how financial actors can legally hold cryptocurrencies on behalf of their clients without getting overwhelmed by regulations.

In brief

SEC Seeks to Update Crypto Custody

Led by Paul Atkins, the SEC’s reform project titled Amendments to the Custody Rules aims to update the rules of the Investment Advisers Act and the Investment Company Act of 1940. The document filed with the OIRA at the White House, specifies that the Commission intends to:

modernize the rules governing the custody of clients’ and funds’ assets, including crypto assets in each case.

Investment advisers and management companies have until now faced traditional custody rules designed for traditional financial securities, which were poorly suited to digital assets. As a result, many institutional actors preferred to stay on the sidelines rather than expose themselves to compliance risk. The SEC aims precisely to remove this ambiguity and eliminate certain outdated provisions. All this without sacrificing the protection of crypto investors.