The Securities and Exchange Commission (SEC), the US securities regulator, has recently indicated that there is a possibility of allowing crypto custodians to handle the trading of digital assets legally considered securities. Should this move come to fruition, it could spell significant changes throughout the entire crypto space of the US.
Five Years Without Enforcement
The recent announcement from the regulator made it clear that it would start allowing crypto broker-dealers a grace period of five years without enforcement action. This will only be done, however, should these broker-dealers verify that they themselves are in control of the digital assets, and not their customers.
As it stands now, the proposal is out for feedback. This, in turn, came after those operating within the space started to call for clarity about the matter at large.
In the announcement, the Commission detailed the statement’s position, explaining that these broker-dealers would limit its business on digital asset securities in order to isolate the risks involved.
Alongside this, the notice stated that these broker-dealers would need procedures and policies in place that would protect private keys needed to transfer these digital securities as well as assess the distributed ledger technology of these respective cryptocurrencies.
The Predictable Approval
Some of the top voices in the crypto custodian space took this new announcement from the SEC with open arms. In particular, Caitlin Long, the CEO of Avanti Financial, went as far as praising this move as being enabling as opposed to restrictive.
Carlos Domingo stands as Securitize’s CEO, and gave his own welcome to these new plans, describing it as very good news for the crypto space, potentially. Domingo described this move as proof that the regulator is taking an approach far more proactive than before through the support of the industry’s development.
The Blockchain Association had Kristin smith gave comment about the matter. Smith declared that operators and consumers within the industry will develop greater levels of trust in the sector, thanks to this greater level of regulatory certainty.
With this greater level of regulatory certainty, Sith explained that the custody marketplace could expand, and consumers would be allowed enough confidence to believe that crypto is both secure and safe in its usage.
Watching And Waiting
As the SEC explained, this initial grace period of five years will allow the regulator to gain a greater level of understanding as to how it should regulate the space at large. As such, the plans themselves have been opened for consultation before the new regulations are introduced, which itself is still subject to approval.