Bain Capital Crypto and different outstanding funding corporations voice considerations over the proposed SEC custody rule change.
Representatives from Bain Capital Crypto, Electrical Capital, Haun Ventures, Dragonfly Digital and Ribbit Capital have joined different trade voices in opposing the Securities and Exchange Commission’s (SEC) proposed changes to custodial rules for registered funding advisers (RIAs).
Resistance is constructing
Latest submissions by cryptocurrency insiders to the U.S. Securities and Change Fee (SEC) have highlighted the absence of self-custodial options for digital property beneath the brand new guidelines.
The trade is now banding collectively to precise their alarm, with high compliance and authorized executives from main corporations, signing a joint letter to boost the difficulty. These 5 corporations spotlight they collectively handle greater than $15 billion in property, together with crypto property, on behalf of institutional traders.
If the proposed guidelines take impact, the necessities for safekeeping shopper funds overseen by a registered funding adviser (RIA) could be expanded to cowl property that aren’t presently regulated by the SEC as securities.
If the proposed guidelines take impact, the necessities for safekeeping shopper funds overseen by a registered funding adviser (RIA) could be expanded to cowl property that aren’t presently regulated by the SEC as securities.
Crypto asset managers, which embody enterprise corporations with token investments, could be amongst these impacted by the up to date pointers. They might be required to make use of a certified custodian that’s regulated within the U.S. for his or her digital property.
Nonetheless, many inside the crypto trade are pushing again in opposition to this, arguing that it might result in elevated custody charges and stifle innovation within the sector.
Highlighting the negatives
The executives have known as into query the proposed rule modifications, highlighting their damaging influence on cryptocurrency merchants and, most notably, their traders.
The letter goes so far as to counsel that with out acceptable provisions for crypto self-custody, traders stand to overlook out on helpful funding alternatives. On the identical time, advisers neglect their fiduciary responsibility to their traders.
The SEC’s proposed rule modifications are nonetheless open for public remark, and it stays to be seen how the regulator will reply to the considerations being raised by the cryptocurrency trade.