SEC Considers Easing Crypto Custody Rule for Advisors
The U.S. Securities and Exchange Commission (SEC) is rethinking a proposed rule that would tighten custody requirements for investment advisors dealing with cryptocurrencies. Acting SEC Chair Mark Uyeda hinted at this change during a San Diego industry conference, as reported by Reuters.
The original rule, introduced in February 2023 under the biden administration, aimed to make advisors store crypto assets with qualified custodians and meet extra safeguards. However, Uyeda noted that public feedback highlighted meaningful concerns about the rule’s broad scope and compliance challenges.
Uyeda’s proclamation signals a shift in SEC policy, reflecting a more industry-friendly approach. The SEC is also reviewing a separate rule requiring mutual funds and ETFs to report holdings monthly rather of quarterly. This regulation, adopted in August 2023, faced criticism, especially regarding AI’s role in trading strategies.
These adjustments align with the Trump administration’s broader crypto policy changes. The SEC has already rescinded crypto accounting guidance, dropped enforcement actions, and set up a crypto task force. With Paul Atkins set to become the new chair, the agency is moving towards easing regulatory burdens on digital assets and financial institutions. This move could ease the pressure on firms handling digital assets, potentially boosting innovation and reducing compliance costs.
Key points include:
- Reconsidering the crypto custody rule.
- Reviewing the monthly reporting rule for funds.
- Establishing a crypto task force to reassess regulatory priorities.
These steps indicate a friendlier stance towards the crypto industry, addressing earlier stringent measures under former Chair Gary Gensler. The SEC’s shift under the Trump administration reflects a more crypto-friendly approach.
acting SEC Chair Mark Uyeda announced the potential rollback during a San Diego conference. The original rule, proposed in February 2023, required advisors to store crypto assets with qualified custodians. However, public feedback highlighted compliance challenges, leading the SEC to explore alternatives.
Additionally, the SEC is reviewing a rule that mandates monthly portfolio reporting for funds, rather of quarterly. This change aims to enhance transparency but has faced industry concerns, especially regarding AI in trading.
These policy shifts signal a more lenient stance towards digital assets.With Paul Atkins set to become the new chair, the SEC’s approach is becoming more industry-friendly.
