• The Securities and Exchange Commission voted to propose new amendments affecting rules around crypto asset custody in the United States.
• Commissioner Hester Peirce (aka „Crypto Mom“) is against the proposed rule change, as she believes it could leave crypto investors more vulnerable to theft and fraud.
• SEC chairman Gary Gensler said that investment advisers would be required to keep users‘ crypto with „qualified custodians.“
The SEC Proposes Crypto Custody Rules
The Securities and Exchange Commission (SEC) recently voted to propose new amendments affecting rules around crypto asset custody in the United States. These changes are intended to enhance protections of customer assets managed by registered investment advisers, expanding the scope of its rules beyond just client funds and securities and including all client assets overseen by an investment adviser – such as cryptocurrencies.
Crypto Mom Is Not a Fan
Commissioner Hester Peirce (aka „Crypto Mom“) is not a fan of these proposed rules, believing they could leave crypto investors more vulnerable to theft and fraud instead of providing protection. In a separate statement, SEC chairman Gary Gensler said that investment advisers would be required to keep users‘ crypto with „qualified custodians“.
Qualified Custodians
Gensler emphasized that even if a crypto company claims that they custody your assets, it’s not the same as qualified custody. He warned investors about this difference in order for them to better protect their assets.
Opposition From Crypto Mom
Despite Gensler’s warnings, Peirce still objects to her agency’s rulemaking surrounding the cryptocurrency industry. She believes these proposed rules will create new risks for cryptocurrency holders due to limited numbers of qualified custodians available for services.
Final Verdict
For now, it seems like the final verdict on these proposed rules has yet to be determined until further discussion takes place among both commissioners and representatives from the cryptocurrency industry.