SEC Prepares Proposal on Crypto Asset Custody Rules

• The SEC has returned to drafting rules on the custodial safekeeping of cryptocurrencies by investment advisers.
• The previous administration failed to complete this initiative.

The U.S. Securities and Exchange Commission (SEC) is preparing a new proposal for rules on the custodial safekeeping of client assets that will take cryptocurrencies into account.

The regulator has submitted the concept of the new rule to the White House Office of Management and Budget. After review, the document may be formally presented as a regulatory proposal.

According to the description in the SEC’s regulatory agenda, the initiative is intended to modernize rules governing the custody of investment advisers’ client assets and fund assets.

The SEC also noted that investment advisers and firms still have questions about complying with existing requirements when holding crypto assets. The regulator believes that the new regulation will make it possible to clearly define the legal framework for custodial safekeeping for these market participants.

In addition, the initiative предусматриває modernizing the rules and repealing a number of outdated provisions that are no longer necessary to protect investors. In the SEC’s view, these changes will reduce unnecessary regulatory burden in light of the evolution of markets and modern practices for trading and holding securities.