The SEC has officially requested comments and feedback from Broker-dealers in the cryptocurrency space to encourage innovation around the application of the Customer Protection Rule to digital asset securities. The term "digital asset" in this context is meant to refer to "an asset that is issued and/or transferred using distributed ledger or blockchain technology (“distributed ledger technology”), including, but not limited to, so-called “virtual currencies,” “coins,” and “tokens.”" As the SEC goes on to state, this effort for feedback is meant to continue the discussion around safeguardeding customer funds, deposits and assets in the new digital age.
Our view is that this is an extremely positive development for Custodians and other large institutional players in the space, and it will almost certainly lead to continued legislation and rule making for digital assets. Even though additional rules will follow, the SEC is now actively seeking and considering the opinion of the public sector in that rule making process in the name of innovation. The end result should be a more secure, safeguarded system for the retail investor to participate in, and cryptocurrency participants should welcome this statement by the SEC. Regulation will continue to develop in the digital asset space.
The end result should be a more secure, safeguarded system for the retail investor to participate in