SEC Revives Crucial U.S. Crypto Custody Regulation That Stumbled Under Previous Leadership - Cryptonews.net

The SEC has reopened a rulemaking effort focused on crypto custody—a measure that previously lost momentum under the prior leadership. At its core, the proposed framework would impose stricter requirements on investment advisers holding digital assets for clients, likely mandating use of independent, qualified custodians to safeguard funds.

The original proposal faced industry pushback over technical feasibility and cost, particularly around proving control of assets and segregating client holdings. Its revival signals that the current SEC views investor protection in crypto custody as a priority. For the broader market, clearer custody rules could reduce counterparty risk and encourage more institutional participation, as firms often cite custody uncertainty as a key barrier to entry.

Observers should watch whether the revised version addresses earlier concerns regarding staking, lending, and self-hosted wallets. The rule’s trajectory will also indicate how the SEC balances innovation with oversight—an important signal for banks and trust companies positioning themselves as custodians in the digital asset space.