The U.S Securities and Exchange Commission (SEC) is taking steps towards regulatory clarity in the digital asset space by hosting a series of roundtable discussions. The upcoming session, titled “Know Your Custodian: Key Considerations for Crypto Custody”, will focus on how cryptocurrencies should be securely held. This is a critical issue in digital asset regulation, as existing rules require advisers to store client assets with a “qualified custodian”, sparking considerable debate.
Chairman Paul S. Atkins, newly appointed and committed to prioritizing crypto oversight, will provide opening remarks at the roundtable. Other executives, including Chief of Staff Richard Gabbert and Commissioners Caroline Crenshaw, Mark Uyeda, and Hester Peirce, will also join the discussion. The event aims to address existing regulatory gaps and issues related to crypto asset custody.
The SEC’s broader push for regulatory modernization in the digital asset space includes sessions on topics like crypto trading, tokenization, and decentralized finance. The agency is looking to develop a temporary regulatory framework to balance innovation and compliance until long-term rules are established. Industry players like Coinbase, Uniswap Labs, and the NYSE have been involved in the discussions to explore a more adaptive regulatory model.
Legal experts have highlighted crypto custody as a pressing regulatory challenge, as it requires a balance between regulatory compliance and client needs. The limited number of qualified custodians equipped to handle digital assets further complicates the issue. Justin Browder of Simpson Thacher has criticized the SEC’s current stance, urging for a more practical approach to accommodate the demands of investors for accessibility and protection.
The SEC’s roundtable discussions aim to foster an informed dialogue on redefining crypto governance in the U.S. upcoming sessions on tokenization and decentralized finance will further explore key issues in the digital asset space. By bringing together industry stakeholders and regulatory experts, the SEC is working towards creating a regulatory framework that balances the need for innovation with the necessity of compliance in the evolving crypto landscape. Through these efforts, the SEC is paving the way for a more transparent and robust regulatory environment for digital assets in the U.S.
