SEC to Vote on New Rules Impacting Crypto Services
The United States Securities and Exchange Commission (SEC) plans to propose new rule changes that could impact the services that crypto firms can offer their clients.
The securities regulator is working on a draft proposal that would make it difficult for crypto firms to hold digital assets on behalf of their clients as “qualified custodians.”
SEC panel vote
On Feb. 15, a five-member SEC panel will vote on the proposal.
A majority vote of 3 out of 5 is needed for the rest of the SEC to officially vote on the proposal.
If approved, the proposal would be amended with feedback where necessary.
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If finalized, some crypto firms might have to move their customer’s digital asset holdings elsewhere.
The financial institutions might be subject to “surprise audits” related to their custodial relationships or other ramifications.
The SEC has deliberated on what is required to be a qualified custodian of cryptocurrencies since March 2019.
The specific changes the SEC is seeking need to be clarified.
Recent SEC actions
The news of the vote proposal comes after a Jan. 26 report suggesting the SEC would soon target Wall Street investment advisers over their crypto custody offerings to clients.
The SEC has had its hands full with Paxos Trust, the stablecoin issuer of Binance USD, which they believe was issued as an unregistered security.
Paxos has stated that they will be prepared to “vigorously litigate” if necessary.