US House Financial Committee Takes a Stand Against SEC Custody Proposal
In Brief
The proposed rule is problematic for the banking industry, as it would be disadvantageous to the digital asset industry.
Six subcommittee chairmen and the chair of the United States House of Representatives Financial Services Committee have written to SEC Secretary Vanessa Countryman expressing their concerns about the agency’s proposed advisory clients custody rule. Crypto industry figures, including House of Representatives Financial Services Committee Chair Robert Wilson, are also opposed.
The Financial Services Committee wrote that the SEC was exceeding its powers in its rule dealing with registered investment advisers (RIA) — which raises requirements for qualified custodians of client funds.
Their letter states that the proposed regulation would “prohibit” assets outside the agency’s jurisdiction, such as “art, cash, commodities, and nontraditional assets,” and “incur custody rules on entities that already are subject to the custody rules of another regulator.”
The proposed rule would have an enormous impact on digital asset market participants, as entrepreneurs and companies within the ecosystem are currently struggling to find banks that want to custody their assets.
The proposed rule’s restriction of qualified custodians to federally chartered entities would create difficulties for them and reduce competition, according to the letter. In addition, the proposed rule would interact with Staff Accounting Bulletin 121 to disadvantage the banking industry further.
- The SEC takes cryptocurrency seriously. A press release published May 3 entitled “SEC Nearly Doubles Size of Enforcement’s Crypto Assets and Cyber Unit” details this.
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- Anthony Scaramucci, Financier
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About The Author
Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
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Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
