SEC Chair Considers New Framework for Digital Asset Custody

According to PANews, U.S. Securities and Exchange Commission (SEC) Chair Atkins stated on Monday that the current framework allowing brokers to act as custodians for digital assets might need to be abolished and replaced. He revealed that the SEC is considering granting hedge funds the authority to self-custody crypto assets. Currently, only two institutions nationwide have been granted 'special purpose broker-dealer' licenses. Atkins highlighted during a digital asset roundtable that the low response rate is due to 'significant restrictions' set by the previous administration. He emphasized that broker-dealers have never been prohibited from custodying non-securities crypto assets or crypto securities. However, he noted that the SEC might need to clarify how customer protection and capital requirements apply to such institutions. Atkins has requested SEC staff to explore new regulatory paths for cryptocurrencies, including examining whether custody rules should be revised to allow hedge funds, trading companies, and investment advisors to self-custody digital assets.