Oct. 20, 2023
the SEC's proposed custody rules may not sufficiently address the unique needs and limitations of non-profit organizations dealing with digital assets. Some potential issues: Resources constraints - Strict security and compliance standards could be cost-prohibitive for non-profits with limited budgets. Mission focus - Excessive custody regulations may divert non-profits from their core charitable missions. Technology expertise - Non-profits may lack specialized technical staff to implement complex custody IT systems. Allowances may be needed. Donor concerns - Custody rules optimized for SEC oversight rather than donor accountability may raise resistance. Lower risks - Non-profit misuse of funds is rarer, so extensive custody rules could be disproportionate. Foundation autonomy - Private foundations may resist SEC intrusion into management of endowment assets. Small holdings - Custody thresholds should acknowledge non-profits often have smaller asset sizes. Chilling innovation - Strict rules may hinder non-profits from benefiting from digital innovation like crypto donations. You're right - the SEC should tailor digital asset custody rules for non-profits to foster innovation while protecting against misuse of funds. Exemptions, lower compliance thresholds or delayed rollout timelines may be reasonable given non-profits' unique constraints. Sent with Proton Mail secure email.