Next for the U.S. SEC: Agency's chief crypto counsel illuminates path for custody
Taylor Lindman, the top lawyer on the agency's Crypto Task Force, says the SEC is trying to get firms comfortable with blockchain technology and crypto assets.
WASHINGTON, D.C. — As the U.S. Securities and Exchange Commission is blazing through much of its crypto agenda, trying to nail down a U.S. regulatory structure in the absence of a solution from Congress, its rules for the proper custody of crypto assets are coming soon.
The SEC has a proposal for custody — governing both investment firms and broker-dealers — under White House review, and Taylor Lindman, chief counsel of the SEC's Crypto Task Force, said the effort is meant to allow the market to "understand how you can carry a non-security crypto asset within a broker-dealer without needing some special registration" and to make clear for investment advisers where they can park client assets, such as in a state-chartered trust.
"The big picture with this is we're trying to assimilate the existing securities intermediaries and our existing market participants into a world where they feel comfortable utilizing blockchain, even holding crypto assets, transacting crypto assets, and that includes crypto assets that are securities as well as crypto assets that are non-securities," Lindman said Tuesday at the CoinDesk Policy & Regulation event in Washington.
The SEC's previous effort to pursue a custody rule in 2023 was under a decidedly different regime, and then-SEC Chair Gary Gensler said that crypto firms themselves wouldn't qualify to custody the assets. That rule, though, never moved to final form and was scrapped when President Donald Trump returned to the White House and appointed crypto-friendly leadership at the regulator.