Acting SEC Chairman Speaks About Cryptocurrencies: Announces Positive Development!

The U.S. Securities and Exchange Commission is reviewing the proposal to tighten crypto asset custody requirements.

SEC Acting Chairman Mark Uyeda announced that the agency first reviewed the controversial rule proposed in February 2023. The rule mandates registered investment advisers to store their crypto assets in a qualified custodian and requires these custodians to meet certain legal requirements.

Speaking at the 2025 Investment Management Conference in San Diego organized by the Investment Company Institute, Uyeda acknowledged the concerns raised by relevant parties. "Given such concerns, there may be significant challenges to proceed with the original proposal," he said, adding, "Therefore, I have requested the crypto task force to work closely with SEC staff to evaluate appropriate alternatives."

The custody rule, introduced under the Biden administration, aims to expand current custody regulations, as former SEC Chairman Gary Gensler seeks to encompass all customer assets under the control of an advisor. The proposal has sparked reactions from investment advisors, financial institutions, and participants in the crypto industry by attempting to bring additional safeguards to crypto assets.

According to current SEC regulations, registered investment advisers are required to keep their assets in a qualified custodian such as a bank or broker-dealer. The expansion of these requirements to include cryptocurrencies has raised concerns about further limiting the willingness of banking institutions to serve the industry and ensuring the security of custody services.

The proposal faced strong opposition from Republicans in Congress, as well as from crypto firms and traditional financial institutions. The American Bankers Association, along with other financial sector groups, had previously warned that the rule could have a “significant impact” on commercial activities.