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US SEC to submit a new proposal on crypto custody

TL;DR

  • US SEC to submit a proposal on crypto custodial services
  • The SEC wants an internal committee to vote on the bill
  • The regulator wants to go after Wall Street companies

The US SEC has announced that it is considering submitting a new draft law that could shape the future of crypto offerings in the United States. According to a Bloomberg article, the US SEC wants to change the kind of firms that can act as official guardians of user assets. This new rule will impact several firms that work with crypto and related products.

US SEC wants an internal committee to vote on the bill

According to reliable sources, the US SEC will appoint a committee of its members to deliberate and vote on the proposal. After the vote will determine if the regulators should move forward with the draft law. The US SEC will require three of the five members of the panel to vote in favor of the bill for the whole house to pass their votes.

If the bill is approved, the US SEC will go back to its drawing table with the mindset of looking into the necessary amendments that need to be made before it is rolled out. Although the US SEC has been on this issue in the last few years, the concerned parties need help with the kind of legislation the regulator wants to pass. According to a breakdown that Bloomberg made, things would change for users and their custodians.

The regulator wants to go after Wall Street companies

One specific change that could happen is that users would need to carry their funds to another place while the firms will not be able to support custodial services anymore. It also mentioned that this new bill could open the firms to routine audit checks to check the extent of their custodial services. This latest news is coming off the back of a recent report which revealed that the US SEC is targeting investment companies on Wall Street.

The regulator mentioned that the investment firms in the area have been offering users custodial services without the needed license to carry out such operations. In the last few days, the regulator has been embroiled in a saga with Paxos after it leveled accusations bordering on selling unregistered securities to users. The company involved is the firm producing BUSD, the stablecoin of Binance. However, Paxos Trust has released a statement saying it is prepared to fight the regulator in court to prove its claims are false. This is not the first time the US SEC has had this sort of issue with a company in the crypto sector.

The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Owotunse Adebayo

Adebayo loves to keep tab of exciting projects in the blockchain space. He is a seasoned writer who has written tons of articles about cryptocurrencies and blockchain.

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