The U.S. Securities and Exchange Commission is considering rolling back a proposed rule that would impose stricter custody requirements for investment advisors handling cryptocurrencies.
Acting SEC Chair Mark Uyeda announced the potential reversal during an industry conference in San Diego on Monday, citing concerns over the rule’s broad scope and compliance challenges, according to Reuters reporting.
The custody rule, proposed in February 2023 under the Biden administration, would require registered investment advisors to store crypto assets with a qualified custodian while meeting additional safeguards.
Uyeda acknowledged that public feedback raised significant objections, prompting the agency to explore alternative approaches.
ETF to report monthly portfolio holdings
Uyeda also indicated that the SEC is reviewing a separate rule requiring mutual funds and exchange-traded funds to report their portfolio holdings monthly instead of quarterly.
The regulation, adopted in August 2023, aimed to enhance transparency, but industry feedback has highlighted concerns — particularly regarding the role of artificial intelligence (AI) in trading strategies.
These moves reflect a broader shift in SEC policy under the Trump administration, which has already reversed several crypto-related initiatives introduced under former Chair Gary Gensler. The SEC recently rescinded accounting guidance for crypto firms, dropped enforcement actions against industry players, and established a crypto task force to assess regulatory priorities.
With former SEC Commissioner Paul Atkins set to take over as chair, Uyeda’s push for regulatory revisions signals a more industry-friendly stance, particularly toward digital assets and financial institutions wary of stringent compliance demands.
