SEC Considers New Crypto Custody Rules for Brokers and Hedge Funds – Coincu

U.S. SEC Chairman Paul Atkins has announced potential changes to existing crypto custody regulations for brokers, as stated at a digital asset roundtable on May 13, 2025. Such a decision could influence hedge funds, allowing them to self-custody digital assets.

The proposed changes signal a significant shift in the regulatory landscape, suggesting a move towards clearer crypto asset management rules. Concerns about the previous administration’s approach, which restricted innovation, were addressed.

Key Developments, Impact, and Reactions

At the recent roundtable, Atkins mentioned the potential overhaul of the existing custody framework, highlighting how previous regulations prevented brokers from effectively handling digital assets. Significant limitations of current rules were discussed, suggesting a need for more flexible approaches for brokers and hedge funds. The SEC could pave the way for a more inclusive digital asset trading environment by considering these regulatory changes.

The changes may address how brokers and hedge funds manage digital assets, allowing more autonomy in custody and potentially leading to a broader acceptance within traditional financial markets. Immediate implications might include adapting to new compliance and risk management strategies suited for digital assets.

Market reactions have varied, with some industry leaders welcoming the potential regulatory adjustments while others urge further clarifications. Hester Peirce, SEC Commissioner, has expressed support for a practical approach to crypto regulation, emphasizing the importance of innovation and customer protection. The finance sector closely monitors these discussions, expecting potential shifts in SEC policy.

“Innovation unfortunately has been stifled for the last several years due to market and regulatory uncertainty that the SEC has fostered.” – Paul Atkins, Chairman, U.S. Securities and Exchange Commission (SEC)

Historical and Market Context: Bitcoin and Regulatory Evolution

Did you know? In prior decades, stringent regulations limited brokers’ roles in digital asset management, but recent industry advancements could allow brokers more freedom, aligning with crypto’s rapid growth.

Bitcoin (BTC) currently trades at $102,472.10 with a market cap of $2.04 trillion and a 61.57% market dominance, according to CoinMarketCap. 24-hour price has dipped by 1.75%, but gains over 30 days are notable at 19.67%. The substantial trading volume reflects ongoing investor interest.

The concluding Coincu research suggests that any regulatory adjustments by the SEC could potentially bolster market confidence, fostering an environment for innovation. That may yield enhanced financial market integration and heightened institutional investment in crypto assets.