SEC Statement on Custody of Digital Asset Securities

Dec 23

On December 23, 2020, the SEC’s Division of Trading & Markets issued a first of its kind Statement on the custody of digital asset securities that allow clearing broker-dealers to mitigate the risks of custody of a security on a DLT network and comply with SEC Rule 15c3-3. The main takeaways from the Statement are:

The Statement, which is akin to no-action relief, is only applicable to broker-dealers that limit their business exclusively to digital asset securities.
The Statement encompasses only digital asset securities, not cryptocurrencies.
The Statement provides for the establishment of extensive documentation, but the requirements appear practical for the broker-dealers in the space.
The statement requests comments and is subject to change during its 5-year effectiveness.

MAA’s Eli Wishnivetski contributed to EisnerAmper’s summary of the guidance found here.

SEC’s Division of Examinations’ Continued Focus on Digital Asset Securities