SEC Targets Sweeping Crypto Custody Rewrite Amid White House Review

The U.S. Securities and Exchange Commission (SEC) has submitted a proposal to the White House Office of Management and Budget, aiming to rewrite the rules for crypto custody. The new rulemaking is expected to differentiate between traditional finance assets held by custodians and digital assets.

The current rules for qualified custodians are outdated, and the SEC is trying to modernize provisions that apply to investment advisers and companies. This change is driven by the growing importance of digital assets in the financial landscape.

The latest draft is a departure from former SEC Chair Gary Gensler's 2023 proposal, which was meant to bring blockchain assets under existing custody requirements. The new proposal has been designated as 'deregulatory,' but its specific changes are not yet clear.