This week, the SEC's Division of Investment Management issued a letter seeking industry and public input on custody issues arising from digital assets.
The "Custody Rule," Rule 206(4)-2 under the Advisers Act of 1940, provides it is a fraudulent act or practice to have custody of client assets, unless an adviser complies with Custody-Rule requirements, including among others, by a qualified custodian subject to annual independent audits.
The Division’s recent Guidance Update on custody issues focused on inadvertent custody (e.g. where boilerplate in the adviser’s ...
This term, Congress is set to consider several bills—each with bipartisan sponsorship—targeting the fields of blockchain, cryptocurrency, and fintech. This spurt of legislative activity indicates an increased awareness by lawmakers of both the opportunities for innovation in these fields and the potential pitfalls and risks for illicit use posed by these new technologies. The following are several of the bills that have been introduced this term to date which aim to promote blockchain and cryptocurrency:
- The Blockchain Regulatory Certainty Act (H.R. 528), introduced in ...