SEC Considers Reversing Crypto Custody Rule Under Uyeda
1min read The U.S. Securities and Exchange Commission (SEC) is considering a reversal of a proposed rule that would tighten cryptocurrency custody regulations. This potential shift comes under the leadership of Acting SEC Chair Mark Uyeda, who has indicated a willingness to re-evaluate policies implemented during the previous administration.
Uyeda announced on Monday that the SEC might alter or even abandon stricter rules proposed in February 2023. These rules would have required investment advisers to store cryptocurrencies with qualified custodians, a measure aimed at enhancing the protection of client assets. However, Uyeda expressed significant concerns about the feasibility and impact of this rule, particularly in light of the challenges faced by the crypto industry.
During his keynote address at the 2025 Investment Management Conference, Uyeda highlighted the difficulties in advancing the proposed rule and directed SEC staff to collaborate with the crypto task force to explore more viable alternatives. This move signals a departure from the regulatory approach taken by the Biden administration, which had sought to impose stricter oversight on the cryptocurrency sector.
In addition to the custody rule, Uyeda also mentioned the possibility of modifying a regulation that requires mutual funds and exchange-traded funds to report their holdings monthly instead of quarterly. This indicates a broader review of SEC policies, with a focus on ensuring that regulations are both effective and cost-efficient.
Uyeda's remarks underscore a shift in the SEC's regulatory stance, emphasizing the need for rules that respect the limits of the agency's statutory authority. This approach contrasts with the more stringent regulatory framework proposed under the Biden administration, which had aimed to enhance transparency and security in the cryptocurrency market.
The proposed custody rule, introduced by former SEC Chair Gary Gensler, had faced opposition from Republicans, crypto firms, and financial companies. Critics argued that the rule could limit the number of banks willing to work with the crypto sector, potentially hindering innovation and growth in the industry.
Uyeda's decision to reconsider this rule is part of a broader effort to reassess and potentially revise regulations implemented under the previous administration. This marks the second instance this month where Uyeda has directed SEC staff to review proposed changes, indicating a significant shift in the agency's regulatory priorities.
As the SEC continues to navigate these changes, the agency is also under pressure from the White House to implement staff cuts, although specific details have not 
