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<ul><li>The securities regulator is working on a draft proposal that would make it difficult for crypto firms to hold digital assets on their client’s behalf as “qualified custodians”</li><li>If finalized, some crypto firms might have to move their customer’s digital asset holdings elsewhere</li></ul><h2 id="header-0">The SEC might want a law that will restrict the crypto companies to control or secure the assets of their customers.</h2>The United States Securities and Exchange Commission (SEC) might be planning to propose new rule changes this week that could have a great impact on the crypto firms that offer safe custody of crypto assets. According to a Feb. 14 report from Bloomberg citing “people familiar with the matter,” <a href="https://www.coingabbar.com/en/crypto-currency-news/sec-commissioner-goes-against-her-agency-on-kraken-crackdown" rel="noopener noreferrer nofollow">the securities regulator </a>is working on a draft proposal that would make it difficult for crypto firms to hold digital assets on their client’s behalf as “qualified custodians.”This could have a ripple effect on the many hedge funds, private equity firms, and pension funds that work alongside such crypto firms. This news has created a tussle in the American crypto industry as many crypto service providers might have to wind up their business due to this law.A five-member SEC panel is going to vote on Feb. 15 on whether the proposal is good enough to go into the drafting stage. A majority vote of 3 out of 5 would be required in order for the rest of the SEC to officially vote on this proposal. If approved, the required changes would be in alignment with the feedback wherever it&#39;s required.Since March 2019, the SEC has been pondering upon what should be required to be a qualified custodian of cryptocurrencies. However, it is still unclear what specific basic requirements this U.S. financial watchdog is looking out for in crypto custodians to fulfill.If finalized, some crypto firms might have to move their customer’s digital asset holdings elsewhere, and these financial institutions might be subject to “surprise audits” related to their custodial relationships or other ramifications. However, no scope is left for the businesses to change their operations in accordance to the policy of the SEC as nothing is clear as of now.The news of Wednesday’s vote proposal comes on the heels of a Jan. 26 report from Reuters suggesting that the SEC would soon come after Wall Street investment advisers over how they’ve offered crypto custody to their clients. In recent days, the <a href="https://www.coingabbar.com/en/crypto-currency-news/court-declares-busd-security-binance-ceo-cz-responds" rel="noopener noreferrer nofollow">SEC has had its hands full with Paxos </a>Trust — the stablecoin issuer of Binance USD (BUSD) — which they believe to have been issued as an unregistered security. Paxos has stated that they will be prepared to “vigorously litigate” if necessary.The SEC&#39;s proposed rule changes could have a major impact on the crypto industry. However, the total impact of this decision is yet to be evaluated.Also, Read - <a href="https://www.coingabbar.com/en/crypto-currency-news/sbf-to-face-court-proceedings-for-its-criminal-charges-before-sec-and-cftc-cases" rel="noopener noreferrer nofollow">SBF to Face Court Proceedings for its Criminal Charges Before SEC and CFTC Cases</a>

No More Crypto Custodians in the U.S.A? SEC to Bring New Laws!

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