SEC Revises Crypto Custody Rule Proposal to Expand Eligible Institutions

The US Securities and Exchange Commission (SEC) has submitted a revised proposal for crypto custody rules to the White House's Office of Management and Budget for review.

This move is significant, as it aims to clarify which institutions qualify to hold cryptocurrencies on behalf of clients. The new rule would remove outdated provisions and make it clear who can store digital assets.

In 2023, SEC Chair Gary Gensler's proposal was met with opposition from banks, venture firms, and crypto platforms. It was eventually shelved due to its narrow definition of qualified custodians, which excluded most crypto-native firms.

The current SEC chair, Paul Atkins, has taken a different approach, aiming to expand the list of eligible custodians. This includes firms like Anchorage Digital, Paxos, and BitGo that hold federal or state trust charters specifically for digital asset custody.