The SEC Chairman noted that since the emergence of Bitcoin, the cryptocurrency market has transformed into a multi-trillion-dollar asset class, but regulations have not kept pace with this growth. The new proposal reportedly aims to address the problem of finding suitable third-party custodians, particularly for newly developed crypto assets, a process that can take months.
The proposal doesn’t just cover custody rules specific to cryptocurrencies. The SEC also plans to modernize some long-outdated custody provisions under the Investment Advisers Act and the Investment Company Act of 1940. The new regulations aim to establish record-keeping, auditing, and custody standards that are consistent with current industry practices.
The SEC’s new regulatory proposal will be open to public consultation for 60 days. After evaluating the feedback received, the Commission will decide on the final version of the regulation.
This move is a continuation of the comprehensive regulatory steps recently taken by the SEC under Atkins’ leadership towards the cryptocurrency sector. The institution had previously published statements on tokenized securities, offered comments on which crypto assets should be considered securities, and proposed a new regulatory package called “Regulation Crypto Assets” in August.
The SEC also announced the “Innovation Exemption” regulation in September, aimed at facilitating on-chain trading of tokenized shares under certain conditions. The SEC’s Regulation Crypto Assets proposal, introduced in August, also aims to create a special securities issuance framework for specific crypto asset investment contracts.
*This is not investment advice.
