SEC Considers Withdrawing Proposed Crypto Custody Rule Change

2 mins mins

Key Points:

Potential withdrawal of a significant crypto custody rule.
Implications for investment firms managing crypto assets.
Call for clarity from the SEC as rule evaluation persists.

sec-chairman-weighs-withdrawal-amidst-crypto-custody-concerns — SEC Chairman Weighs Withdrawal Amidst Crypto Custody Concerns

Mark Uyeda, Acting Chairman of the U.S. SEC, announced the potential withdrawal of a cryptocurrency custody proposal on March 18, 2025, at a conference in San Diego.

The proposal’s reconsideration may lead to regulatory uncertainty, affecting investment firms’ crypto asset management strategies.

SEC Chairman Weighs Withdrawal Amidst Crypto Custody Concerns

SEC Acting Chairman Mark Uyeda is evaluating the withdrawal of the rule proposed in February 2023, aimed at tightening cryptocurrency custody requirements. Uyeda, during the Investment Management Conference, highlighted numerous concerns from commenters over the rule’s broad implications.

Uyeda directed SEC staff to collaborate with the Cryptocurrency Working Group on finding alternatives, potentially delaying compliance changes. The re-evaluation follows recent directives to reassess other SEC rules.

“I am considering withdrawing the proposed rule that would tighten cryptocurrency custody requirements for registered investment advisers.” – Mark Uyeda, Acting Chairman, SEC

Market reaction has been cautious, with industry figures emphasizing the importance of regulatory clarity. The SEC’s direction may affect crypto advisers’ operations and future compliance strategies.

Did you know?
In 2023, the SEC’s proposal initially sought to include all client assets under enhanced custody rules, reflecting a broad regulatory trend towards expanding oversight of digital asset management.

Experts indicate that revising the custody rule could either streamline or complicate regulatory frameworks for digital assets. Historical analysis suggests shifting regulatory approaches often influence investment strategies in the cryptocurrency market.