SEC Signals Major Policy Shift on Crypto Custody
In a dramatic shift that could reshape the cryptocurrency investment landscape, SEC Acting Chair Mark Uyeda has announced a comprehensive review of the controversial crypto custody rule proposed during the Biden administration. This development marks a significant departure from the agency’s previous hardline stance on digital asset regulation.
The announcement, made at the Investment Company Institute’s 2025 Investment Management Conference, signals the SEC’s move toward a more measured approach to crypto regulation, potentially opening new opportunities for institutional investors in the digital asset space.
Key Changes in SEC’s Regulatory Approach
- Review of 2023 Custody Rule: The SEC is reconsidering the controversial proposal that would have expanded qualified custodian requirements to include crypto assets
- Potential Withdrawal: The agency may completely withdraw the original proposal due to ‘significant challenges’
- New Framework: A ‘back to basics’ approach is being considered for future rulemaking
- Compliance Extensions: Possible delays for recently adopted rules
Market Implications and Industry Response
The potential reversal of the crypto custody rule could have far-reaching implications for institutional adoption of digital assets. Industry experts suggest this shift could unlock billions in institutional investment previously restricted by regulatory uncertainty.
As noted in recent reports about crypto firms rushing for bank status, this regulatory pivot aligns with broader changes in the crypto landscape under the current administration.
Looking Ahead: What This Means for Crypto Markets
The SEC’s evolving approach suggests a more balanced regulatory framework may be emerging. Commissioner Hester Peirce’s recent statements indicate that key pieces of the new regulatory framework will be established this year, potentially creating a more favorable environment for institutional crypto investment.
