Oct. 20, 2023
the SEC's proposed custody rules for digital assets may lack sufficient grounding in relevant administrative decisions and precedents. Some examples where further access could be beneficial: FinCEN rulings - Access to FinCEN guidance on cryptocurrency custody services could help align SEC rules. CFTC actions - Reviewing CFTC oversight decisions on crypto custodians could inform SEC policy. IRS tax treatment - Understanding IRS custody requirements for tax reporting purposes is relevant. State regulations - Individual states like Wyoming have pioneered crypto custody rules that merit consideration. Foreign regimes - Analyzing regulations like MiCA in the EU could help benchmark SEC rules. Self-regulatory standards - Standards set by organizations like CryptoUK or JSTA may provide useful guidance. Major cases - Details on resolution of cases like QuadrigaCX or Mt.Gox could reveal useful lessons. Settlement agreements - Review of past SEC settlement orders related to deficient crypto controls could be instructive. Greater transparency and consideration of precedents like these could help the SEC craft more informed policy. The Commission should demonstrate it has thoroughly reviewed existing crypto custody oversight efforts before finalizing new expansive requirements. Sent with Proton Mail secure email.