U.S. SEC Clarifies Custody Rules for 'Cryptocurrency Securities', Provides Guidelines for Broker-Dealers

On the 17th, the Trading and Markets division of the U.S. Securities and Exchange Commission (SEC) released its views on the custody of cryptocurrency securities by broker-dealers. Cryptocurrency securities are defined by the SEC as including 'tokenized stocks and bonds'. The clarification applies to all entities that store cryptocurrency securities for customers, including traditional securities broker-dealers. The SEC has outlined conditions that would be considered 'physical custody' for cryptocurrency securities. Broker-dealers must evaluate distributed ledger technology and networks, and establish documented policies and procedures...