Paul Atkins

Donald Trump

Biden

President Donald Trump

The US Securities and Exchange Commission could change or scrap a rule proposed under the Biden administration that would tighten crypto custody standards for investment advisers, according to the agency’s acting chair, Mark Uyeda.In prepared <a href="https://www.sec.gov/newsroom/speeches-statements/uyeda-ici-031725" rel="noopener noreferrer nofollow">remarks</a> to an investment industry conference in San Diego on March 17, Uyeda said the rule <a href="https://cointelegraph.com/news/sec-proposes-tougher-rules-as-part-of-its-crypto-custody-crackdown" rel="noopener noreferrer nofollow">proposed in February 2023</a> had seen commenters express “significant concern” over its “broad scope.”“Given such concern, there may be significant challenges to proceeding with the original proposal. As such, I have asked the SEC staff to work closely with the crypto task force to consider appropriate alternatives, including its withdrawal,” Uyeda said.The rule was floated under the Biden administration during <a href="https://cointelegraph.com/learn/articles/who-is-gary-gensler-regulating-crypto" rel="noopener noreferrer nofollow">Gary Gensler’s</a> tenure leading the regulator. It aimed to expand custody rules for investment advisers to any and all assets held for a client, including crypto, and upped the requirements to protect them.<figure><img src="https://s3.cointelegraph.com/uploads/2025-03/0195a6d5-0b7a-7e03-b527-b5fa17084170" title="" alt="SEC could axe proposed Biden-era crypto custody rule, says acting chief"><figcaption style="text-align: center;">Source: <a href="https://x.com/SECGov/status/1901708806792376824" rel="noopener noreferrer nofollow">SEC</a></figcaption></figure>This meant that investment advisers would have to custody their clients’ crypto with a qualified custodian. Gensler <a href="https://www.sec.gov/newsroom/speeches-statements/gensler-statement-custody-021523" rel="noopener noreferrer nofollow">said</a> at the time that investment advisers “cannot rely on” crypto platforms as qualified custodians due to how they operate.The proposal caused friction with Uyeda and Commissioner Hester Peirce, along with industry advocacy bodies <a href="https://cointelegraph.com/news/war-on-crypto-newly-filed-letters-lambast-proposed-sec-custody-rules" rel="noopener noreferrer nofollow">who claimed the rule</a> was unlawful and dangerous.“How could an adviser seeking to comply with this rule possibly invest client funds in crypto assets after reading this release?” Uyeda <a href="https://www.sec.gov/newsroom/speeches-statements/uyeda-statement-custody-021523" rel="noopener noreferrer nofollow">remarked</a> at the time. He did, however, support the proposal despite disagreeing “with a number of provisions.”&nbsp;Peirce, who was the sole commissioner of the five to vote against the rule, said at the time that the proposed rule “would expand the reach of the custody requirements to crypto assets while likely shrinking the ranks of qualified crypto custodians.”Related: <a href="https://cointelegraph.com/news/congress-repealed-irs-broker-rule-regulate-defi" rel="noopener noreferrer nofollow">Congress repealed the IRS broker rule, but can it regulate DeFi?</a>&nbsp;Uyeda’s latest remarks come days after he said on March 10 that <a href="https://cointelegraph.com/news/sec-looking-abandon-requiring-crypto-firms-register-exchanges" rel="noopener noreferrer nofollow">he had asked SEC staff</a> “for options on abandoning” part of a proposal pushing for some crypto firms to register with the regulator as exchanges.The Trump-era SEC has also <a href="https://cointelegraph.com/explained/sab-121-rescinded-what-it-means-for-crypto-custody-and-regulation" rel="noopener noreferrer nofollow">killed a rule</a> that asked financial firms holding crypto to record them as liabilities on their balance sheets, called SAB 121.In December, President Donald Trump picked former SEC Commissioner Paul Atkins to take over from Uyeda to chair the agency. This is now a step closer, with a Senate hearing <a href="https://cointelegraph.com/news/trumps-sec-chair-paul-atkins-senate-committee-hearing" rel="noopener noreferrer nofollow">reportedly slated</a> for March 27.Magazine: <a href="https://cointelegraph.com/magazine/sec-crypto-laws-unclear/" rel="noopener noreferrer nofollow">SEC’s U-turn on crypto leaves key questions unanswered</a>&nbsp;

SEC could axe proposed Biden-era crypto custody rule, says acting chief

Cointelegraph

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