- SEC lifts crypto custody restrictions for broker-dealers.
- Potential increase in institutional crypto investment.
- Continued uncertainty in crypto asset classification.
Recent SEC actions could broaden institutional access to crypto markets but leave regulatory uncertainty unresolved.
The U.S. SEC’s decision to repeal its 2019 joint statement on broker-dealer custody of crypto assets marks a shift towards a more accessible crypto market. This change may facilitate brokerages entering crypto custody services.
The SEC’s Division of Trading and Markets issued new guidance effective May 2025. This guidance encourages engagement with crypto custody, potentially increasing institutional investments in crypto securities like Ethereum and Solana. Withdrawal of Joint Staff Statement clarifies the shift.
Industry players anticipate greater participation from traditional financial institutions. However, the regulatory framework’s vagueness concerning crypto assets classified as securities persists. As Commissioner Caroline Crenshaw observed:
“Over the last several months, we have heard repeatedly that the Commission, and its new Crypto Task Force, are embarking on a quest to give the crypto industry regulatory clarity. We’ve heard ‘change is coming fast’ for crypto at the SEC and that the crypto markets will soon be free from the ‘limbo’ they’ve been ‘languishing… in for years.’ …These developments lay bare that we are not actually chasing crypto regulatory clarity—these assets cannot be both securities and not securities at the exact same time. …We are thwarting any meaningful attempt to apply a coherent regime to crypto assets and rewarding a maximally aggressive approach to entering our markets. This results in opportunistic–and deeply inconsistent–legal interpretations. Even our staff can’t reconcile these inconsistencies, though their concerns don’t seem to matter much these days.” Source
Historically, regulatory reversals, such as those involving Bitcoin ETF debates, have stimulated significant market reactions. Industry stakeholders are alert to potential shifts in market dynamics and institutional engagement.
This regulatory update highlights the SEC’s evolving stance on crypto asset treatment. While opportunities for brokerages may arise, market participants await more definitive guidelines for a coherent crypto regulatory environment.
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