SEC wants to revise rules for custody of crypto assets

The US securities regulator SEC has submitted a new proposal to the White House to clarify the rules on custody of crypto assets. The rules apply to investment advisers and investment companies. The proposal is a response to questions from the sector about how digital assets may be held on behalf of clients without breaching existing regulations. Bloomberg reports.

In brief:

• The SEC sends a proposal to the Office of Management and Budget to clarify the custody framework for crypto assets.
• Some existing custody rules may be abolished because the SEC considers them outdated.
• After the review, an SEC vote and a public consultation period of at least 60 days will follow.

SEC responds to questions from the investment sector

The SEC sent the proposal to the White House’s Office of Management and Budget on 25 August. This is according to a federal list of upcoming SEC rulemaking. According to the SEC, the proposal is a direct result of questions from investment companies and advisers who want clarity on how they can hold digital assets for their clients without breaching the rules.

The proposal aligns with the broader crypto agenda of the Trump administration, while legislation on the market structure for crypto remains stalled in the Senate. Earlier this year, the US also extended sanctions to crypto and technology under its Iran policy.

Outdated rules to be scrapped

In addition to the clarification, the SEC also wants to abolish a number of existing custody rules. Those rules no longer fit with how the market operates, according to the regulator. The current trading and custody options for digital assets make some requirements outdated, in the SEC’s view.

The full contents of the proposal will only be made public after the Office of Management and Budget has completed its review. That will be followed by a vote within the SEC and a public consultation period of usually at least 60 days. In August, crypto startups already raised more than $1 billion, illustrating the growing interest in the sector.