a16z And Blockchain Association Criticizes SEC Tightening Crypto Custody
- There are two more new letters from a16z, and the Blockchain Association sent to the SEC to question new proposals to tighten crypto custody.
- Both institutions agree that the SEC action will significantly reduce investment in digital assets.
- The SEC’s February proposal would impose stricter rules on investment advisors in the custody of assets, including cryptocurrencies.
A proposal by the US SEC to tighten crypto custody rules has been met with opposition from two major industry organizations, a16z, and the Blockchain Association.
On May 8, the Blockchain Association, an advocacy body for the crypto industry, sent a letter to the U.S. Securities and Exchange Commission (SEC) criticizing the proposed changes to the U.S. Securities and Exchange Commission (SEC) with its governing rules. Venture fund Web3 Andreessen Horowitz (a16z) sent a similar letter three days ago.
Blockchain Association policy attorney Marisa Tashman Coppel tweeted on May 8 that the SEC’s proposed rule would “dramatically reduce investment in digital assets,” claiming that in its current form, the regulation This rule is “illegal.” In the letter, the Blockchain Association offered more than a dozen separate arguments to refute the SEC. In other statements, it said the rule was beyond the control of the SEC and would prohibit advisors from dealing with crypto exchanges and expose investors’ assets to greater risk.
The same day, a16z General Counsel Miles Jennings tweeted her letter to the SEC, saying the company “didn’t speak vaguely” and calling the SEC’s proposal a “misguided and transparent attempt to wage war on crypto.” a16z details similar arguments to the Blockchain Association but focuses more on what it means for registered investment advisors. These namely advisors would be banned from using cryptocurrencies and rules that may violate SEC regulations of such companies.
14 report from Bloomberg citing “people familiar with the matter,” the securities regulator is working on a draft proposal that would make it difficult for crypto companies to hold digital assets on behalf of their clients as “qualified custodians.” This could affect many hedge funds, private equity firms, and pension funds that operate in conjunction with such crypto companies.
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