{"id":552478,"date":"2023-02-16T05:51:53","date_gmt":"2023-02-16T02:51:53","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/sec-proposes-tougher-rules-as-part-of-its-crypto-custody-crackdown\/"},"modified":"2023-02-16T05:51:53","modified_gmt":"2023-02-16T02:51:53","slug":"sec-proposes-tougher-rules-as-part-of-its-crypto-custody-crackdown","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/sec-proposes-tougher-rules-as-part-of-its-crypto-custody-crackdown\/","title":{"rendered":"# SEC proposes tougher rules as part of its crypto custody crackdown"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3717bdf2ca2\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3717bdf2ca2\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/sec-proposes-tougher-rules-as-part-of-its-crypto-custody-crackdown\/#%E2%80%9D_SEC_proposes_tougher_rules_as_part_of_its_crypto_custody_crackdown_%E2%80%9C\" >&#8221; SEC proposes tougher rules as part of its crypto custody crackdown &#8220;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_SEC_proposes_tougher_rules_as_part_of_its_crypto_custody_crackdown_%E2%80%9C\"><\/span>&#8221; SEC proposes tougher rules as part of its crypto custody crackdown &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-71a7a826>A five-member panel of the United States Securities Exchange Commission (SEC) has voted 4-1 in favor of a proposal that may make it more difficult for cryptocurrency firms to serve as digital asset custodians\u00a0in the future.<\/p>\n<p>The proposal, which is yet to be officially <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>roved by the SEC, recommends amendments to the \u201c2009 Custody Rule\u201d will apply to custodians of \u201call assets\u201d including cryptocurrencies,\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.sec.gov\/news\/statement\/gensler-statement-custody-021523\">according<\/a> to a Feb. 15 statement from SEC Chairman Gary Gensler.<\/p>\n<p>Gensler stated that currently, some crypto trading platforms that are offering custody services are not actual \u201cqualified custodians.\u201d <\/p>\n<p><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.sec.gov\/files\/ia-6240-fact-sheet.pdf\">According<\/a> to the SEC, a qualified custodian is <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a>ly a federal or state-chartered bank or savings association, trust company, a registered broker-dealer, a registered futures commission merchant, or a foreign financial institution. <\/p>\n<p>In order to become a \u201cqualified custodian\u201d under the newly proposed rules, U.S. and offshore firms would additionally need to ensure that all custodied assets \u2014 including cryptocurrencies \u2014 are properly segregated, while these custodians will be required to jump through additional hoops such as annual audits from public accountants, among other transparency measures.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">We <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/SECGov?ref_src=twsrc%5Etfw\">@SECGov<\/a> just proposed to expand &amp; enhance the role of qualified custodians when registered investment advisers custody assets on behalf of investors.<\/p>\n<p>Thru our rule, investors would get the time-tested protections\u2014and qualified custodians\u2014they deserve.<\/p>\n<p>What does this mean? \u2b07\ufe0f <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/RerUGnpArI\">pic.twitter.com\/RerUGnpArI<\/a><\/p>\n<p>\u2014 Gary Gensler (@GaryGensler) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/GaryGensler\/status\/1625899563167916032?ref_src=twsrc%5Etfw\">February 15, 2023<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>While Gensler said these amendments would \u201cexpand the scope\u201d to all asset classes, he specifically took a shot at the crypto industry:<\/p>\n<blockquote><p>\u201cMake no mistake: Today\u2019s rule, the 2009 rule, covers a significant amount of crypto assets. [&#8230;] Further, though some crypto trading and lending platforms may claim to custody investors\u2019 crypto, that does not mean they are qualified custodians. Rather than properly segregating investors\u2019 crypto, these platforms have commingled those assets with their own crypto or other investors\u2019 crypto.\u201d<\/p><\/blockquote>\n<p>\u201cWhen these platforms go bankrupt\u2014something we\u2019ve seen time and again recently\u2014investors\u2019 assets often have become property of the failed company, leaving investors in line at the bankruptcy court,\u201d the SEC Chairman added.<\/p>\n<p>Gensler also pointed to the industry&#8217;s track record to suggest that few crypto firms would be reliable enough to serve as qualified custodians:<\/p>\n<blockquote><p>\u201cMake no mistake: Based upon how crypto platforms generally operate, investment advisers cannot rely on them as qualified custodians.\u201d<\/p><\/blockquote>\n<p>However, not every SEC member is on board with Gensler\u2019s plans.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2023-02\/e6aaae38-c985-4276-9706-5710e7a0d6cf.jpg\"><figcaption style=\"text-align: center;\">Commissioner Hester Peirce\u2019s statement in response to the proposed rule changes on investment adviser custody set out by SEC Chairman Gary Gensler. Source: <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.sec.gov\/news\/statement\/peirce-statement-custody-021523\">SEC.<\/a><\/figcaption><\/figure>\n<p>While the proposal isn\u2019t \u201cregulation by enforcement\u201d per se, Commissioner Hester Peirce <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.sec.gov\/news\/statement\/peirce-statement-custody-021523\">said<\/a> \u201cthe latest SEC statement seems designed for im<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>te effect\u201d to take down the crypto industry:<\/p>\n<blockquote><p>\u201cSuch sweeping statements in a rule proposal seem designed for immediate effect, a function proposing releases should not play. These statements encourage investment advisers to back away immediately from advising their clients with respect to crypto.\u201d<\/p><\/blockquote>\n<p>As for the proposal itself, Peirce believes it would do more harm than good. <\/p>\n<p>She explained that such stringent measures will force investors to remove their assets from entities that have developed sufficient safeguarding procedures to mitigate and prevent fraud and theft:<\/p>\n<blockquote><p>\u201cThe proposal would expand the reach of the custody requirements to crypto assets while likely shrinking the ranks of qualified crypto custodians. By insisting on an asset neutral approach to custody we could leave investors in crypto assets more vulnerable to theft or fraud, not less.\u201d<\/p><\/blockquote>\n<p>As for the next steps, Peirce noted the agency will soon schedule in a 60-day comment period once the proposal has been published in the Federal Register. <\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>US lawmakers and experts debate SEC\u2019s role in crypto regulation <\/em><\/strong><\/p>\n<p>However, the commissioner is concerned that this timeframe isn\u2019t sufficient to allow the public to analyze all aspects of the proposal. <\/p>\n<p>Those who voted in favor of the proposal are hoping to implement the new rules within 12-18 months, according to Peirce, adding that it was an &#8220;aggressive timeline&#8221; given the changes being proposed<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"law_decoded\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/sec-proposes-tougher-rules-as-part-of-its-crypto-custody-crackdown\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; SEC proposes tougher rules as part of its crypto custody crackdown &#8220; A five-member panel of the United States Securities Exchange Commission (SEC) has voted 4-1 in favor of a proposal that may make it more difficult for cryptocurrency firms to serve as digital asset custodians\u00a0in the future. The proposal, which is yet to&#8230;<\/p>\n","protected":false},"author":1,"featured_media":552479,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/s3.cointelegraph.com\/uploads\/2023-02\/469c4e97-4249-45a9-890a-1f1c68a5d663.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74898,75269,74355,117,70934,8575],"class_list":["post-552478","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-sec","tag-us-government","tag-adoption","tag-business","tag-regulation","tag-usa"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/552478","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=552478"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/552478\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/552479"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=552478"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=552478"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=552478"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}