SEC's Crypto Regulatory Work Continues with New Proposals and Framework

The US Securities and Exchange Commission (SEC) is continuing its work on crypto regulatory proposals, with Chair Paul Atkins stating that the regulator's efforts to develop a comprehensive framework for the sector are 'not finished.'

Atkins emphasized that the SEC's latest proposal on crypto custody is part of a broader effort to modernize the regulatory framework for digital assets and provide greater clarity to investment advisers and funds. He noted that the crypto asset market has grown from a niche segment following the advent of Bitcoin in 2008 into a multi-trillion-dollar asset class, while existing rules and regulations have not kept pace.

The SEC Chair highlighted that the existing rules require the use of permitted custodians, but custody services for new crypto assets can take months to become available. He stated that the proposal would provide a clear regulatory framework for the custody of crypto assets, giving investment advisers and funds a compliant pathway where none existed before.

Atkins also mentioned the SEC's recently introduced Innovation Exemption, which seeks to provide a pathway for trading tokenized National Market System (NMS) stocks. He signaled further regulatory action, stating that 'our work is not finished' and that more regulatory proposals are on the horizon.