The U.S. Securities & Exchange Commission’s Division of Trading and Markets staff issued frequently asked questions explaining how certain broker-dealer financial responsibility rules and transfer agent rules apply to crypto asset activities and distributed ledger technology. On broker-dealers, the FAQs address custody and capital issues for crypto assets, including in-kind creations and redemptions for spot crypto asset exchange-traded products. They state that the possession and control requirements in Rule 15c3-3 are not implicated when a broker-dealer holds non-security crypto assets for customers, and discuss net capital treatment for proprietary positions in Bitcoin and Ether, the only two crypto assets currently underlying crypto asset ETPs trading on national securities exchanges. The FAQs also underscore that non-security crypto assets held by a broker-dealer are not protected by the Securities Investor Protection Act. On transfer agents, the FAQs address when a registered transfer agent may use distributed ledger technology as its official Master Securityholder File or a component of it, which may be relevant to tokenized securities issuance. The statement accompanying the release characterizes the FAQs as incremental and notes ongoing work, including calls to replace the special purpose broker-dealer statement with a more fit-for-purpose statement on custody of crypto assets that are securities, while noting that the SPBD remains a non-exclusive safe harbor.
U.S. Securities & Exchange Commission 2025-05-15
U.S. Securities & Exchange Commission staff issues FAQs on broker-dealer and transfer agent rules for crypto assets and distributed ledger technology
The SEC's Division of Trading and Markets issued FAQs on broker-dealer financial responsibility and transfer agent rules for crypto assets. They address custody and capital issues, including net capital treatment for Bitcoin and Ether, and clarify that non-security crypto assets held by broker-dealers aren't protected by the Securities Investor Protection Act. They also discuss transfer agents' use of distributed ledger technology and ongoing efforts to update custody rules for crypto assets that are securities.