The US Securities and Exchange Commission has broken the door to welcome the Crypto Parent Authority to a large number of companies that have earned state charter as trust companies that would include trust relationships with Coinbase, Kraken and other high-profile names in Krypto.
SEC’s Division of Investment Management issued a so-called letter without action on Tuesday, a document that ensures that the regulator has no intention of pursuing any enforcement measures from those who participate in the specific activity-in this case that SEC-registered advisers and funds can park digital assets in the state’s trusts.
Such qualified-Custodian issues had represented a political battlefield during the term of office of former SEC chairs Gary Gensler and Jay Clayton, where the former had led the agency to introduce a later abandoned proposal that would have limited what kinds of companies could handle the crypto from regulated investment advisers. Gensler made it clear that he specifically meant to muscle out exchanges such as coinbase.
But SEC’s new leadership-Især President Paul Atkins is pursuing a Crypto-Forward campaign, with Atkins, who earlier this week says that establishing industrial policies is the agency’s highest priority (as awarded by pro-crypto-president Donald Trump).
While Tuesday’s letter without action is not a formal agency rule, it carries enough weight to free up companies from short -term compliance with concerns. Specifically, the document said that SEC “would not recommend enforcement measures to the Commission under the custody provisions against a registered adviser or regulated fund to treat a state trust company as a ‘bank’ in terms of placement and maintenance of crypto assets.”
The previous argument from Gensler was that cryptic companies were not safe and sufficiently regulated to qualify as risk -free enough for registered investment advisers to retain their customers’ assets.
“Although it was never adopted, the proposal has created problems for investment advisers through its claim that most crypto assets are likely to be funds or crypto -active securities covered by the current rule and thus must be maintained with a qualified custodian,” Commissioner Hester Peirce said in a speech in Singapore on Tuesday.
She argued that the agency “should consider updating the rules of allowed custodians of registered investment advisers and investment companies”, adding that technologically skilled companies may need permission for custody assets.
But Democratic Commissioner Caroline Crenshaw, who was allied with genes on this point two years ago, issued a statement that opposed the treatment without action in which he said SEC effectively treats crypto as something except for the rest of the financial sector. And it ignores the efforts of companies pursuing federal chartering from the Currency Office.
“Instead of creating equal terms, we leave investors and markets to gamble in an unnecessary game with 50-state regulatory roulette bare to accommodate crypto,” she said. “Performing a shift of this order of magnitude through relief without public comment and without any financial analysis is not available for many reasons, not least because it is probably contrary to the law on administrative procedure, although this has become commonplace by this commission.”
SEC has been pursuing a number of cryptop policies under Atkin’s recent project crypto, and the chairman has set an agenda to issue formal crypto rules in the coming months. Meanwhile, Congress has made extensive progress in legislation into more complete markets for the US markets for digital assets.
