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SEC restarts crypto custody rule effort for investment advisers
The SEC has sent an updated concept for its next proposed rule to the White House Office of Budget and Management for review before any proposal is issued.
CoinDesk reports the U.S. Securities and Exchange Commission is restarting work on crypto custody rules for investment advisers, sending its latest effort to the White House for review as it prepares the next regulatory step.
The SEC is making initial progress toward a proposed rule after a prior custody attempt did not survive under former SEC Chair Gary Gensler, and the new approach is intended to be more industry friendly by removing burdens from existing regulations.
According to the SEC's public regulatory agenda description, the future effort aims to improve and modernize custody rules for investment adviser client assets and fund assets, including crypto assets, though the agency has not yet provided further details on what the proposal would require.
In 2023, Gensler had warned that investment advisers could not rely on typical crypto platforms as qualified custodians, and that earlier proposal would have required custody with a narrow set of regulated entities, such as certain banks or trust companies, SEC-registered broker-dealers, or CFTC-regulated futures commission merchants.