The US Securities and Exchange Commission (SEC) is reconsidering a proposed rule that would have changed how investment advisers manage cryptocurrency holdings.
The rule, introduced in 2023 under former chair Gary Gensler, sought to require advisers to store client crypto assets with “qualified custodians”, such as banks or trust companies.
It was meant to strengthen investor protections but was widely criticized for being too restrictive.
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Acting SEC chair Mark Uyeda recently acknowledged these concerns. Speaking at an investment conference in San Diego, he pointed out that the rule’s scope had raised objections. He stated, “Given such concern, there may be significant challenges to proceeding with the original proposal”.
Uyeda has directed SEC staff to work with the agency’s crypto task force to explore alternatives, including the possibility of scrapping the rule altogether.
He has also paused enforcement of certain crypto-related rules and is reconsidering how the SEC defines “exchanges”.
This is not the only policy from Gensler’s tenure under review. Some of these policies had led to legal challenges, including a lawsuit filed by 18 states before Gensler’s departure.
Meanwhile, the SEC recently postponed decisions on ETFs for XRP
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