SEC sends revamped crypto custody rules to the White House, keeps contents secret

The SEC has submitted its overhauled crypto custody rules for investment advisers to the White House. The text remains under wraps. The article SEC sends revamped crypto custody rules to the White House, keeps contents secret appeared first on Journal du Coin.

The U.S. financial watchdog has reached a decisive milestone in its oversight of digital assets by submitting a reform proposal on cryptocurrency custody to the Office of Information and Regulatory Affairs (OIRA) on August 25. This White House-affiliated bureau is now tasked with reviewing the regulatory project, which directly impacts investment advisors. While the specific contents of the text remain confidential for now, the stakes are high: the goal is to define strict conditions under which financial intermediaries may hold crypto-assets on behalf of their clients, thereby closing a problematic legal loophole.

This initiative continues the efforts launched by Gary Gensler in February 2023. The stated objective is to modernize provisions deemed obsolete while establishing robust safeguards, such as the mandate to use qualified custodians and the prohibition against lending or pledging client funds. The challenge for the SEC is complex: it must strike a delicate balance between the need to protect retail investors from the risks of bankruptcy or mismanagement and the desire to avoid stifling technological innovation through excessive regulatory rigidity.

For the industry, this move is seen as a positive signal, indicating a shift by the regulator toward establishing clear rules rather than relying on the litigious strategy used thus far. Influential players like the Blockchain Association have welcomed this transition toward a more predictable regulatory framework. This approach appears to confirm a paradigm shift within the agency, which is increasingly focused on written regulatory projects, such as the recent "Regulation Crypto Assets" proposal aimed at structuring fundraising for sector projects.

However, the implementation timeline remains uncertain, as the OIRA validation process could lead to substantial modifications before any public consultation. This matter adds to an already heavy legislative workload, while other structuring bills, such as the CLARITY Act, remain stalled in the Senate. This temporal uncertainty fuels a degree of frustration within the industry, which, while welcoming the push for clarity, is now waiting for concrete measures capable of securing the market for the long term while ensuring its competitiveness on the international stage.