SEC Unveils Next Stage in Cryptocurrency Regulation

The US Securities and Exchange Commission (SEC) plans to introduce more regulatory proposals for cryptocurrencies, according to Chair Paul Atkins. The agency's efforts are part of a broader effort to update federal securities rules for digital assets. Atkins stated that the SEC would continue developing its crypto framework after addressing custody requirements, with more regulatory proposals on the horizon.

The proposed framework, which was announced on October 1, would permit registered investment advisers, registered investment companies, and business development companies to hold crypto assets themselves in certain circumstances. The proposal would also allow state trust companies to serve as custodians for client and fund crypto holdings, subject to conditions.

Atkins emphasized that the current custody requirements largely address traditional financial assets and that many provisions predate the internet. The growth in demand for crypto investments has highlighted the need for clearer rules on holding digital assets on behalf of clients.