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The new rules approved by the United States Securities and Exchange Commission (SEC) may shoot a hole through the whole crypto industry, as investment advisors like Grayscale Investment and Bitwise Asset Management will no longer be allowed to use "unqualified custodians" as a means to store crypto.
This rule is particularly detrimental to crypto, but it cuts across other digital assets and is thought to make digital investments more secure. The rule that has been guiding custodians has existed for close to 60 years now and enforces holding assets into chartered banks and brokers.
A majority of these chartered banks and broker-dealers that operate within the crypto space are not approved by the SEC. This new rule will limit the number of qualified custodians in the crypto market.
Another concern is that the SEC will not make it clear what they mean by "qualified custodian" on purpose so that they can gate active players within the space. Some of those on the New York Stock Exchange are already starting to brag about the fact that they will be able to serve their clients in the midst of all this. One example is Bakkt, who, through their general counsel, explained that they are confident that they will still be able to serve their clients.
They could have also said that they are lucky their deal with the SEC went through. Gary Gansler and four other commissioners were noted to have been in full support of this rule, but Peirce, who has been named Crypto Mom in the council, stood against it. Her concerns are unequal watch over the non-traditional digital assets when compared to traditional assets.
She continued that small advisers may be unable to reach some agreements, and it would lead to an increased cost on the investors. Gansler believes that subjecting digital assets to the same rules traditional assets have been functioning with is what the crypto market needs. But Pierce is standing against its very destructive nature. Gansler also described most crypto platforms as unreliable for the investment advisers.
My question is when all this will end. When will the SEC get off crypto's back? I think the perfect solution would sound something like "when we all go decentralized." We only started to notice the SEC after Ripple because they openly came as a threat to banks, and now we can't stop seeing them everywhere.
The more we go centralized, the more the SEC will continue to have their eyes on us. Those are my thoughts anyway. Let me know what you think in the comment section below.
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