Gary Gensler Crypto Custodian Rules

SEC Proposes New Rules for Custodians, Including for Cryptocurrency

CryptocurrencyNewsPolicyRegulation
··1 min read

Yesterday, February 15, the US Securities and Exchange Commission (SEC) voted to propose amendments to federal custody rules. The proposal would expand the role of qualified custodians for registered investment advisers who hold assets on behalf of their investors

The SEC claims that the new rules would enhance investor protections by requiring advisers to properly segregate and safeguard all assets, including privately issued securities, real estate, derivatives, and cryptocurrencies.

The official statement by SEC Chair Gary Gensler, specifically calls out crypto, stating that many trading and lending platforms are not qualified custodians, and their commingling of investors’ crypto assets with their own or other investors’ assets could lead to significant losses for investors in the event of the platform’s bankruptcy.

Gensler also said that “based upon how crypto platforms generally operate, investment advisers cannot rely on them as qualified custodians”.

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