Federal securities regulators issued a proposal on updated cryptocurrency custody rules for investment advisors.
The Securities and Exchange Commission (SEC) sent its proposal to the White House’s Office of Management and Budget (OMB) on Tuesday (Aug. 25) per a post on its website.
“This proposed rules and rule amendments would improve and modernize the regulations around custody of investment adviser client assets and fund assets, including to address crypto assets,” the SEC said. “Currently, investment advisers and investment companies have raised questions about how to hold crypto assets in compliance with the current commission custody requirements.”
The commission added that the rulemaking would clarify the framework for crypto asset custody for investment advisers and investment companies, while also making other updates to “remove burdens from certain outdated provisions that are no longer needed to provide investor protection given the evolution in the markets and security trading and holding practices.”
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According to a Wednesday (Aug. 26) Bloomberg News report, full details of the new proposal won’t be made known until the OMB reviews the SEC rule. Once it goes back to the agency, the all-Republican commission will vote on it and release it to the public.
The report added that the SEC normally accepts at least 60 days of public comment before reviewing the input and weaving it onto the final version of the rule, which will also need a vote before it can be put into effect.
The Bloomberg report characterized the development as the latest indiction that regulators are proceeding with the Trump administration’s crypto agenda while legislation meant to define crypto market structure regulation remains stalled in the Senate.
“Few forecasts have been as cloudy as the fate of the Clarity Act in Congress,” PYMNTS wrote last week. “Passed by the House more than a year ago, the crypto market structure legislation has been hung up in the Senate by bipartisan concerns over President Donald Trump and his family’s extensive crypto-currency dealings.”
Still, that report added, the crypto sector is now more optimistic that the act could pass this year following a series of high-level meetings between administration officials and crypto executives.
Meanwhile, another regulator, the Commodity Futures Trading Commission (CFTC), has said it will use its authority to begin establishing a regime for crypto assets if the bill continues to stagnate.
“To achieve this, I’ve directed the CFTC staff to begin exploring rules to codify a CFTC market structure for crypto assets using the agency’s existing authorities,” Michael Selig, the commission’s chairman, said last week.
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