The Blockchain Affiliation mentioned Might 8 that it objects to a custody rule change proposed by the U.S. Securities and Alternate Fee (SEC).
Business group objects to SEC proposal
Marisa Tashman Coppel, Coverage Counsel for the Blockchain Affiliation, warned that the SEC’s rule change might “drastically curtail” crypto funding.
She mentioned, on behalf of the Blockchain Affiliation:
“The proposed rule deviates from the SEC’s obligation … to take an asset-neutral strategy. … Somewhat than permitting for flexibility … the proposed rule discourages custodians and advisers from providing digital asset-related providers. “
Coppel defined that the proposal prevents funding advisers from partaking in self-custody of belongings. She mentioned that the brand new rule might make performing as a professional custodian unaffordable and will forestall advisers from offering the most secure custody attainable.
She added that the rule change might prohibit sure actions corresponding to staking and buying and selling if these providers usually are not operated by a central middleman or certified custodian.
Coppel additionally instructed that digital belongings permit for brand spanking new custody fashions, such because the decentralized custody mannequin known as multi-party computation (MPC). This mannequin, which is utilized by Fireblocks, might not be permissible underneath the proposed guidelines, Coppel mentioned.
Coppel added that guidelines round indemnification (i.e., loss protection) and asset segregation might trigger difficulties for advisers. The truth that the proposed rule applies broadly to all belongings with out authorization from U.S Congress moreover makes the proposal an “illegal growth” of the SEC’s authority, Coppel concluded.
These statements are Coppel’s rationalization of an extended letter revealed by the Blockchain Affiliation Itself, which represents over 100 member firms.
Controversy started in February
The controversy across the rule change first started on February 15, when the SEC proposed the brand new rule. SEC commissioner Hester Peirce quickly expressed her dissent towards the proposal and cited its potential impression on crypto as one concern.
Nevertheless, a number of main crypto platforms, together with Coinbase, BitGo, Anchorage Digital, and Gemini have endorsed the proposal. These firms instructed they have been already compliant with the proposed rule change and wouldn’t be affected by the change.
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