• The U.S. Securities and Exchange Commission has unveiled a set of new rules designed to enhance the protection of investors’ assets in response to the string of collapses of major crypto businesses last year.
• These rules are intended to cover all assets, including crypto, which is in line with objectives identified by U.S. lawmakers.
• The proposed rule would delegate safekeeping of client assets to qualified custodians such as banks or broker-dealers, with the aim to ensure that clients receive standard custodial protections for their assets.
SEC’s New Custody Rules
The U.S. Securities and Exchange Commission (SEC) has recently unveiled a set of new rules designed to enhance the protection of investors’ assets in response to the string of collapses of major crypto businesses last year, raising concern among industry players that more crypto-focused regulation could be incoming.
Objectives Identified by U.S Lawmakers
These rules are intended to cover all types of assets, including crypto, which is in line with objectives identified by U.S lawmakers according to Gary Gensler, chairman at SEC: “I support this proposal because it would help ensure that advisers don’t inappropriately use, lose or abuse investor’s assets,” he said in an official statement released by the agency.”In particular Congress gave us authority to expand the adviser’s custody rule to apply to all assets not just funds or securities.”
Protections Provided For Clients Assets
Under these regulations qualified custodian must provide certain standard custodial protections when maintaining an advisory client’s assets; these protections are designed among other things “to ensure client asset are properly segregated and held in accounts” so they can be protected in case for instance a qualified custodian file for bankruptcy/insolvency etc…
Proposed Changes To Enhance Protections
The proposed changes from SEC seek also “to enhance the protections that qualified custodians provide” as well as “investors working with advisers would receive time tested protections for their assets including crypto”. Therefore these changes will help protect investors from potential misuse/abuse or loss of their digital resources when dealing with advisors/custodians etc..
Crypto Under Scrutiny
It seems clear that under Gensler helm SEC has intensified its efforts into imposing tighter regulations on Crypto industry players often stirring controversies due its toughening approach; one example was last December when SEC published a new set proposals regarding digital tokens potentially security under US laws – something that could have huge implications on this space going forward