SEC Releases FAQs on Crypto Asset Regulations: Implications for Bitcoin and Ethereum Investors

On May 16th, COINOTAG reported that the U.S. Securities and Exchange Commission (SEC) has published a set of Frequently Asked Questions (FAQs) addressing critical aspects of crypto asset activities and distributed ledger technology. This guidance examines essential topics including broker-dealer custody rules, the in-kind creation of crypto Exchange-Traded Funds (ETFs), the net capital treatment of leading cryptocurrencies such as Bitcoin and Ethereum, as well as the responsibilities of transfer agents for tokenized securities. Notably, Commissioner Hester Peirce characterized this initiative as an “incremental step” toward regulatory clarity. She emphasized the crucial point that assets classified as non-securities fall outside the protections provided by the Securities Investor Protection Act (SIPA), signaling a need for investors to perform due diligence in this evolving landscape.