SEC Clarifies Digital Asset Custody Rules, Boosting Crypto Protection
The U.S. Securities and Exchange Commission (SEC) has clarified its stance on digital asset custody, allowing investment advisers to use state-chartered trust companies as qualified custodians for digital assets. This move has been praised for providing much-needed clarity and addressing long-standing doubts about the regulation of digital assets in the United States.
The SEC's decision, outlined in a no-action letter, confirms that these firms can qualify as custodians for both client-held crypto and tokenized securities. State trust firms can serve as crypto custodians provided they have strong safeguards in place and advisers ensure clients' assets are properly protected. This move provides clarity for financial advisers on how to hold crypto on behalf of clients in the USA.
Brian Daly, Director of the Division of Investment Management, stated that this letter is an interim step and full rule-making may follow. Wyoming Senator Cynthia Lummis praised the SEC's recognition of Wyoming's state trust framework. Industry experts have welcomed the move, describing it as 'a textbook example of more clarity for the digital asset space'.
The SEC's clarification on digital asset custody allows investment advisers to use state-chartered trust companies as qualified custodians, providing much-needed clarity and addressing long-standing doubts about the regulation of digital assets in the United States. This move is expected to enhance the protection of clients' assets and promote further growth in the digital asset space.
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