SEC Chairman Atkins Proposes Overhaul of Cryptocurrency Custody Rules, Tackling Hedge Fund Self-Custody

COINOTAG News reported on May 13th that U.S. Securities and Exchange Commission (SEC) Chairman, Gary Atkins, proposed a significant reevaluation of the regulatory framework governing digital asset custody. During a recent digital asset roundtable, he indicated that the current model permitting brokers to act as custodians might be inadequate and called for a comprehensive review. Atkins mentioned the possibility of empowering hedge funds to self-custody their crypto assets, a notable shift in policy. Presently, only two firms in the U.S. have been granted the ‘Special Purpose Broker-Dealer’ license for this purpose. The SEC Chairman attributed much of the stagnation to ‘substantial restrictions’ imposed by previous administrations, stating that broker-dealers had always been permitted to manage non-securities crypto holdings. He urged the SEC staff to investigate potential regulatory updates to enhance customer protection and align capital requirements with the evolving landscape of cryptocurrency regulation.