The Blockchain Association said on May 8 that it opposes changes to custody rules proposed by the U.S. Securities and Exchange Commission (SEC).
Industry Group Opposes SEC Proposal
Blockchain Association Policy Advisor Marisa Tashman Koppel said: warned SEC rule changes could result in “substantially reduced” investments in cryptocurrencies.
Speaking on behalf of the Blockchain Association, she said:
“The proposed rule departs from the SEC’s mandate to take an asset-neutral approach. …rather than allowing flexibility…the proposed rule would discourage custodians and advisors from offering digital asset-related services. “
Coppel explained that the proposal would prevent investment advisers from self-managing their assets. She said the new rules could make it out of reach for her to act as a qualified custodian and prevent advisers from providing the safest custody possible.
She added that rule changes could restrict certain activities, such as staking and trading, if not operated by a central intermediary or qualified custodian.
Koppel also suggested that digital assets will enable new custody models, such as a decentralized custody model called Multi-Party Computation (MPC). Koppel said the model used by Fireblock may not be permissible under the proposed rules.
Coppel added that rules regarding indemnification (that is, indemnity) and asset segregation can pose difficulties for advisors. Coppel concluded that the fact that the proposed rule would apply broadly to all assets without congressional approval would make the proposal an “illegal extension” of the SEC’s powers.
These statements are Koppel’s explanation longer letter It is issued by the Blockchain Association itself, representing over 100 member companies.
The controversy began in February
Controversy over the rule change first began on February 15, when the SEC proposed new rules. SEC Commissioner Hester Peirce expressed her objection Towards the proposal, one of the concerns was the potential impact on crypto.
However, several major crypto platforms such as Coinbase, BitGo, Anchorage Digital and Gemini support the proposal. These companies have already complied with the proposed rule change, suggesting they would not be affected by the change.
The Blockchain Association’s objection to the SEC’s proposed changes to custody rules first appeared on CryptoSlate.
