The SEC is reportedly planning to propose new rule changes this week that could impact what services crypto firms can offer their clients.
According to a report the securities regulator is working on a draft proposal that would make it difficult for crypto firms to hold digital assets on their client’s behalf as qualified custodians.
This may, in turn, affect the many hedge funds, private equity firms and pension funds that work alongside such crypto firms. According to those cited, a five-member SEC panel will vote on on whether the proposal proceeds to the next stage.
A majority vote will be needed for the rest of the SEC to vote on the proposal officially. If approved, the proposal will be amended with feedback where necessary.
While the SEC has deliberated on what should be required to be a qualified custodian of cryptocurrencies since March 2019, people familiar with the matter said it isn’t clear what specific changes the U.S. financial watchdog is seeking.
If finalized some crypto firms might have to move their customer’s digital asset holdings elsewhere. The report added that these financial institutions might be subject to surprise audits related to their custodial relationships or other ramifications.
