The U.S. Securities and Exchange Commission (SEC) accounting advice that would make it prohibitively capital-intensive for lenders to retain cryptocurrency tokens on behalf of clients has disrupted cryptocurrency initiatives.
The SEC and the banking regulatory authorities have ordered lenders that are developing cryptocurrency offers to “stop moving forward with those plans awaiting any form of additional action from those agencies.” A European bank official claimed that starting a crypto custody service in the US would now be unaffordable.
Lenders see a market for their services despite the cryptocurrency sector shrinking. Unless they are combined with their own assets, banks are not compelled to keep such assets. The SEC’s guidelines appear to be applicable in cases when lenders contract out the custodial task to a different company, like Anchorage Digital.
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