SEC Chairperson Paul Atkins: It is possible to overhaul the rules for crypto brokers

The current framework that allows brokers to act as custodians of digital assets may need to be repealed and replaced, US Securities and Exchange Commission (SEC) Chairperson Paul Atkins said on Monday local time, revealing that it is considering granting hedge funds the right to self-custody crypto assets. Only two institutions in the United States currently have "special purpose broker-dealer" licenses. Atkins pointed out at the Digital Asset Roundtable that this lackluster response stems from "significant restrictions" set by the previous administration. "Broker-dealers have never been prohibited from hosting non-securities crypto assets or crypto securities," he stressed. But he also pointed out that the SEC may need to clarify how client protection and capital base requirements apply to such institutions. Atkins has asked SEC staff to explore new paths for cryptocurrency regulation, including whether to amend custody rules to allow hedge funds, trading firms, and investment advisers to self-custody digital assets.