U.S. SEC Issues Guidance on Crypto Custody and Examines ATS Activity
The U.S. Securities and Exchange Commission (SEC) has issued a staff statement providing guidance for broker-dealers on the custody of customers' crypto assets, including protections for private keys. This guidance requires broker-dealers to prepare for blockchain-related events such as malfunctions, 51% attacks, hard forks, or airdrops.
Broker-dealers that adhere to these informal standards outlined in the statement are not expected to face SEC enforcement solely on custody issues. The guidance potentially covers tokenized stocks and debt securities, though a formal definition of crypto security has not yet been established. These staff statements are intended to reflect current SEC thinking but do not represent formal rulemaking and could be reversed if there is a change in SEC leadership.
Additionally, the SEC released a Frequently Asked Questions document examining activity at crypto alternative trading systems (ATSs), with a focus on trading and settlement processes. Commissioner Hester Peirce, who leads the SEC's crypto task force, advocates for clear market-structure rules to enable fair and orderly markets while keeping regulatory burdens manageable.
The broader aim of these efforts is to provide traditional trading firms with greater certainty and comfort when handling crypto assets, fostering safer and more compliant market participation.
