US House financial committee slams SEC’s proposed custody rules

A letter by the US House financial committee confirmed that the proposed rule would have an outsized impact on digital asset market participants. 

In Feb of this year, the United States Securities and Exchange Commission (SEC) proposed a new custody rule, including measures to approve digital assets custody only under the banking institutions. Under the leadership of the SEC chairman Gary Gensler, the SEC body proposed the new custody rule suddenly, just after 2 months, of FTX exchange bankruptcy. The majority of the crypto entrepreneurs slammed the SEC chairman for the newly proposed rule, while few people supported Gensler to work for crypto-dedicated regulatory development work.

On 12 May 2023, The chair of the United States House of Representatives Financial Services Committee and six subcommittee chairs penned a letter to the SEC body to address the issues associated with the new proposed custody rules.

The letter stated that the SEC body is trying to interfere in those legal works, which are not under its authority and also if the proposed rule will get passed then it will bring challenges for those companies which already have better custody service providers under full regulation

Further letter also dragged crypto assets custody under the proposed custody rule and noted that it will bring another road bump in the past of crypto companies, as they are already struggling to get banking partners in the US. 

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Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.

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