SEC proposes new rule on storing digital assets

02/15/2023 15:12 • Digital Disruptors • 88 views

On February 15, the United States Securities and Exchange Commission (SEC) will propose a rule that will effectively require registered investment advisers to store digital assets outside the cryptocurrency industry. The rules proposed by the US SEC on Wednesday will expand the existing provisions of the agency, that is, investment advisers need to hand over clients’ funds and securities to “qualified custodians” for safekeeping. If the new version is approved, it will increase the protection requirements for any assets (including cryptocurrency) entrusted by the investment adviser.

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Analysis based on this information:

The United States Securities and Exchange Commission (SEC) is proposing a new rule that would require investment advisers to store digital assets outside of the cryptocurrency industry. The new rule expands on existing provisions that require investment advisers to keep clients’ funds and securities with qualified custodians for safekeeping. If approved, the new rule would increase the protection requirements for any assets, including cryptocurrency, entrusted by investment advisers.

The move by the SEC is significant as cryptocurrencies are becoming increasingly popular among investors. Bitcoin, for example, saw a surge in value recently, reaching an all-time high of over $64,000. With the rise of cryptocurrency, it has become more important than ever to ensure the safekeeping of digital assets. However, the nature of cryptocurrencies makes them vulnerable to theft and loss, so it is essential to have adequate safeguards in place.

The proposed rule to have investment advisers store digital assets with qualified custodians is an important step towards providing greater protection for investors. Qualified custodians are regulated entities that offer secure storage solutions for assets. If digital assets are stored with qualified custodians, there is less risk of theft or loss, and investors can have more peace of mind when entrusting their assets to investment advisers.

Furthermore, the proposed rule would also increase the accountability of investment advisers, as they would be required to follow stricter rules when it comes to the storage of digital assets. This move by the SEC would likely lead to greater trust in investment advisers and ultimately attract more investors to cryptocurrencies.

In conclusion, the proposed rule by the SEC to have investment advisers store digital assets with qualified custodians is an important step towards providing greater protection for investors. This move would likely lead to increased trust in investment advisers and greater adoption of cryptocurrencies. With the rise of digital assets, it is essential to have adequate safeguards in place, and the SEC’s proposed rule is a step in the right direction.

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SEC proposes new rule on storing digital assets

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