U.S. Securities and Exchange Commission Commissioner Hester M. Peirce used opening remarks for the Crypto Task Force roundtable on crypto custody to argue that regulatory uncertainty is preventing SEC-registered firms from providing custody and related services for crypto assets. She framed the current approach as forcing registrants to avoid “touching” crypto assets and warned that unclear custody expectations can impede trading and investment activity by broker-dealers, alternative trading systems, investment advisers, and investment companies. Peirce emphasized that custody obligations must address investor and intermediary risks without impairing investor choice or limiting advisers’ ability to meet fiduciary duties, and urged a framework that recognizes differences across crypto assets, including circumstances where self-custody may be safer than third-party custody. She highlighted custody considerations for tokenized securities, including how smart contracts and distributed ledgers could allow corrective actions and mitigate some traditional recordkeeping risks, and cautioned against rules that force intermediation where blockchain technology enables investors to self-custody. For discussion, she raised potential policy and rule questions including whether Congress should amend the Securities Investor Protection Act to address crypto assets that are not “securities” under SIPA, whether Uniform Commercial Code Article 8 could help in liquidation scenarios, the future of the Special Purpose Broker-Dealer framework, possible changes to the “ATS three-step” letter and guidance for smart contract-based settlement, how to safeguard customer crypto that is not covered by Rule 15c3-3, and whether adviser and investment company custody rules should permit additional custodian types, move toward principles-based criteria, or facilitate self-custody under defined conditions.
U.S. Securities & Exchange Commission2025-04-25
U.S. Securities and Exchange Commission’s Peirce presses for clearer crypto custody rules at Crypto Task Force roundtable
SEC Commissioner Hester M. Peirce highlighted regulatory uncertainty as a barrier for SEC-registered firms in providing crypto custody services during the Crypto Task Force roundtable. She advocated for a framework addressing investor and intermediary risks without limiting investor choice, recognizing differences across crypto assets. Peirce also raised policy questions about potential amendments to the Securities Investor Protection Act, the role of the Uniform Commercial Code, and the future of custody rules for advisers and investment companies.