I’m Your Huckleberry - SEC Staff Statement on WY Division of Banking’s Letter on Custody of Digital Assets
Earlier this month the staff of the U.S. Securities and Exchange Commission (SEC) published a statement in response to a letter issued by the Wyoming Division of Banking on the custody of digital assets. The SEC staff reminded the Wyoming regulator and the public that the SEC plays an important role determining whether an entity meets the definition of “bank” and “qualified custodian” under the Investment Advisers Act of 1940 and the Custody Rule. The statement noted the SEC has limited the types of firms that may act as qualified custodians to institutions that are subject to extensive regulation and oversight that help to protect client assets.
The statement encouraged parties to discuss with the SEC staff the application of the Custody Rule to digital assets, including the definition of a qualified custodian. The SEC staff also asked for comments on several questions with respect to the Custody Rule and digital assets.