Reversal of Stricter Crypto Custody Rules
The U.S. Securities and Exchange Commission (SEC) is considering scrapping a rule under President Biden that would impose stricter custody rules on investment advisers handling cryptocurrencies.
Acting SEC Chair Mark Uyeda made the potential rollback announcement at an industry conference in San Diego on Monday. He cited the potential for widespread impact and compliance issues with the rule, Reuters said.
The law, passed in February 2023 under the Biden administration, required registered investment advisers to keep digital assets with a qualified custodian and take additional steps of protection. However, public sentiment posed significant obstacles, forcing the SEC to reassess its stance.
ETF Reporting Rules Under Review
Uyeda also said that the SEC is weighing another rule that requires mutual funds and exchange-traded funds (ETFs) to report their portfolio holdings on a monthly basis instead of quarterly.
Adopted in August 2023, the rule was intended to enhance market transparency. However, industry players have raised concerns, particularly with respect to the impact of artificial intelligence (AI) on trading strategies.
Wider SEC Policy Changes
These review regulations are part of a broader shift in the Trump administration, which has already undone some crypto-related policies by former SEC Chairman Gary Gensler.
Among the latest actions by the SEC is to revoke strict accounting guidelines for crypto businesses, drop enforcement cases against participants in the industry, and establishing a crypto task force to revisit regulatory priorities.
With Paul Atkins, the ex-SEC Commissioner, set to become the chair, Uyeda’s lobbying for policy changes translates to a more friendly approach to the industry, particularly concerning digital assets and financial institutions that are worried about compliance burdens.
