The U.S. Securities and Exchange Commission (SEC) is preparing to hold the second discussion session in a four-part event series on regulations related to the crypto market, focusing this time on a controversial issue: digital asset custody.
This is a topic that is causing headaches not only for regulators but also for industry giants such as Fireblocks, Kraken, Fidelity Digital Assets, Anchorage Digital Bank, and BitGo. All will come together tomorrow (Friday) for a public discussion – a move that could have far-reaching effects on the entire way digital assets are protected in the U.S. and beyond in the global market.
🏛 Special event series from the SEC: Crypto under scrutiny
This event is part of the SEC's four-part initiative of the Crypto Task Force, designed to gather diverse opinions and propose policies that are more suitable for the realities of the digital asset market.
The first session took place on April 11, discussing crypto trading. Upcoming topics will include tokenization (scheduled for May 12) and decentralized finance (DeFi) on June 6.
🧩 Why has 'digital asset custody' become a hot topic?
Under the current law of #SEC , investment advisors in the U.S. are required to hold client assets – including crypto – at 'qualified custodians,' which are typically banks or registered brokerage firms.
But the issue is:
Very few entities can fully meet these standards in the context of crypto, which has technical requirements and operational mechanisms that are entirely different from traditional ones.
The crypto market operates 24/7, with a demand for multi-layer security, cold-hot storage, and specific blockchain technology.
The SEC's proposed improvements for 2023 on this issue were controversial due to their lack of feasibility for 'pure crypto' companies.
🗣 What do insiders say?
The event will feature participation from senior SEC leaders, particularly new Chairman Paul S. Atkins, who just took office earlier this week. He is committed to bringing 'clarity in regulation for the crypto industry.'
The two main discussion sessions will revolve around:
Custody through brokerage firms and other forms
Custody for investment advisors and investment companies
Legal experts and business representatives have already prepared arguments. Some representative opinions include:
Neel Maitra, a lawyer at Dechert LLP, calls this the 'biggest question facing the crypto market today,' as investors need both easy access to assets and secure storage.
Justin Browder (Simpson Thacher) criticizes the SEC's current policy for forcing investment advisors to choose between customer needs and legal regulations, as the number of qualified custodians for crypto is currently too few.
🔍 What does this mean for the crypto market and Binance users?
If the SEC expands or adjusts the definition of 'qualified custodian' to better fit the specifics of crypto, then:
Businesses operating in the digital custody sector will find it easier, especially crypto-focused companies like Fireblocks, BitGo, or exchanges with custody services like Kraken.
Users will be better protected, as digital assets are managed by entities that truly understand the technology, rather than being forced to rely on traditional banks that are unaccustomed to handling blockchain.
For Binance users, if the new regulations are recognized and widely implemented, then Binance Custody's custody services could soon meet international standards, expanding service opportunities for institutional clients in the U.S. and other stringent markets.
However, if the SEC continues to apply strict standards similar to those for traditional securities, many crypto companies will struggle to comply and may be excluded from the custody market in the U.S. – creating a risk of unfair competition.
⏳ What will happen next?
The upcoming discussion will not be a place for legislation, but it will be an important basis for the SEC to build or adjust official policies in the near future. In the context of the U.S. still lacking a clear legal framework for crypto, these moves could create a wave of global influence, shaping the future of how digital assets are protected – and how exchanges operate.
⚠️ Risk warning:
The crypto market is constantly changing and poses many legal risks. Digital asset custody – especially for institutional users – requires strict oversight and regulatory compliance. Investors should be cautious, always thoroughly check where assets are stored and choose platforms with reputable, secure custody solutions. Crypto is not for everyone – invest with understanding and a reasonable strategy.