SEC Overhauls Crypto Custody Rules to Boost Investor Confidence

The US Securities and Exchange Commission (SEC) has rewritten its rules for crypto custody firms. The changes aim to provide greater clarity on what constitutes a qualified custodian under the Investment Company Act of 1940.

The SEC's new guidance, which was released in a public statement, provides detailed instructions on how crypto custodians can ensure that they meet the necessary standards to be considered a qualified custodian. This includes requirements for security measures, record-keeping, and disclosure.

According to the SEC, crypto custody firms will now need to demonstrate that they have robust systems in place to protect customer assets from theft, loss, or other forms of damage. They must also maintain accurate records of all transactions and provide clear disclosures to customers about their rights and responsibilities.