SEC Proposes Crypto Custody Rules, Treasury Publishes GENIUS Act Certification Rule
The Securities and Exchange Commission (SEC) has released proposed rules for crypto assets held by investment advisers and funds, allowing self-custody under certain conditions. The rules require advisers to implement safeguarding systems, including private key management, approval of transactions by at least two persons, and segregation of client assets. Additionally, advisers must have cybersecurity controls, an annual internal control report, and quarterly account statements.
The SEC has also issued new FAQs on crypto asset classification, clarifying that staking receipt tokens are digital commodities if issued by a protocol-based liquid staking provider. The FAQs also provide guidance on the treatment of crypto asset buybacks and the creation of investment contracts.
In other developments, the U.S. Department of the Treasury has published an interim final rule for state certification under the GENIUS Act, outlining the procedures for states to supervise smaller stablecoin issuers. The rule requires states to certify that their regime is substantially similar to the federal framework and provides a one-year deadline for initial certifications.