SEC and FINRA Withdraw Broker-Dealer Digital Asset Security Custody Statement

• On May 15, 2025, the SEC and FINRA staff withdrew a 2019 joint statement regarding broker-dealer custody of crypto-asset securities, which many market participants viewed as intended to caution broker-dealers that it may not be possible for them to comply with the federal securities laws and regulations in the context of digital assets.
• SEC Trading and Markets Staff also published FAQs on the same day regarding crypto asset activities and distributed ledger technology. Among other things, the FAQs: (1) provide guidance on the application of the SEC’s customer protection and net capital rules; (2) address SIPA, SIPC and recordkeeping matters; and (3) discuss transfer agent registration requirements and use of distributed ledger technology, in each case in the context of digital assets.

Read More