The U.S. SEC’s Division of Trading and Markets issues new guidance on the custody of crypto-asset securities

According to Foresight News, the U.S. SEC’s Department of Trading and Markets issued the “Statement on Broker-Dealers Custody of Crypto-Asset Securities” to explain the application of “physical possession or control” under Customer Protection Rule 15c3-3(b)(1) of the Securities and Exchange Act in the scenario of “crypto-asset securities”. The statement stated that if a broker-dealer encounters the following circumstances, the department will not object to determining that it has "physical possession" of the relevant assets in the customer account, including direct access and the ability to transfer on the chain; establishing and executing written policies to evaluate and continuously review the distributed ledger technology and network it relies on; if it is known that there are major security or operational problems or other major custody risks, possession shall not be determined.
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