SEC Discusses Crypto Custody Compliance at Roundtable – Coincu

At the SEC’s third crypto roundtable, Chairman Paul Atkins addressed crypto asset custody challenges on October 9, 2023, in Washington, D.C.

Implications include potential regulatory shifts affecting institutional handling of crypto assets and market confidence.

SEC Explores New Frameworks for Crypto Custody

Paul Atkins led discussions at the third crypto roundtable regarding SEC registrants’ challenges in safely custodying digital assets. This dialogue highlighted whether existing custody rules should be modified or if a new framework for crypto asset broker-dealers is necessary to accommodate growing market needs.

Current regulations under the Securities Exchange Act are under scrutiny, suggesting possible changes that could increase market liquidity and bolster investor confidence in crypto assets. These proposals stem from a need for clarity and stability in the regulatory environment for digital assets.

Paul Atkins recognized the inherent flexibility within the SEC’s existing regulations to accommodate crypto developments without waiting for congressional intervention. His perspectives sparked discussions across financial sectors, with various stakeholders, including institutional investors, closely monitoring any shifts towards accommodating crypto assets.

Impact of Regulatory Changes on Crypto Markets

Did you know?
The SEC’s previous inclination under Gary Gensler was to restrict crypto custodial services to qualified custodians, showcasing how regulatory stances can evolve with leadership changes.

Under former SEC Chairman Gary Gensler, stringent measures were emphasized, limiting custodial services to qualified custodians. This roundtable’s dialogue under Atkins may indicate a potential shift toward more flexible regulations conducive to growth in digital asset markets.

Specialized crypto broker-dealers could emerge as a vital component of this regulatory landscape, offering tailored services for crypto custodianship. This move aligns with Atkins’ emphasis on leveraging existing laws while possibly crafting specialized roles devoid of restrictive legislative changes.

“Welcome to the third roundtable of the SEC’s Crypto Task Force. I am in my fourth … [Today’s] roundtable is focused on the challenges SEC registrants face when attempting to safely custody crypto assets for their customers in compliance with the federal securities laws,” – SEC Remarks.