{"id":139117,"date":"2023-05-12T11:17:53","date_gmt":"2023-05-12T11:17:53","guid":{"rendered":"https:\/\/crypto-economy.com\/?p=139117"},"modified":"2023-05-12T13:21:43","modified_gmt":"2023-05-12T13:21:43","slug":"us-house-financial-committee-opposes-secs-proposed-custodial-rule","status":"publish","type":"post","link":"https:\/\/crypto-economy.com\/us-house-financial-committee-opposes-secs-proposed-custodial-rule\/","title":{"rendered":"US House financial committee opposes SEC&#8217;s proposed custodial rule"},"content":{"rendered":"<p style=\"text-align: justify\">Patrick McHenry, Chair of the House of Representatives Financial Services Committee, along with six other subcommittee chairs, expressed their dissatisfaction with the SEC&#8217;s proposed advisory client custody rule to (SEC) Secretary Vanessa Countryman in a <a href=\"https:\/\/financialservices.house.gov\/news\/documentsingle.aspx?DocumentID=408789\" target=\"_blank\" rel=\"noopener\" data-wplink-edit=\"true\">letter<\/a>.<!--more--><\/p>\n<p style=\"text-align: justify\"><b>Chair Patrick McHenry and his co-chairs wrote that the SEC was acting outside of its statutory powers in its proposed rule,<\/b> known as the registered investment adviser (RIA) rule, which tightens criteria for qualified custodians of client assets. They joined a number of prominent members of the <a href=\"https:\/\/crypto-economy.com\/news\/companies\/\" target=\"_blank\" rel=\"noopener\">crypto companies<\/a> in the industry in expressing their opposition.<\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\"><a href=\"https:\/\/twitter.com\/hashtag\/NEW?src=hash&amp;ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">#NEW<\/a>: Chairman <a href=\"https:\/\/twitter.com\/PatrickMcHenry?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">@PatrickMcHenry<\/a>, Subcommittee Chairman <a href=\"https:\/\/twitter.com\/RepFrenchHill?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">@RepFrenchHill<\/a>, and all members of the Committee&#39;s Republican leadership team sent a comment letter slamming <a href=\"https:\/\/twitter.com\/SECGov?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">@SECGov<\/a>&#39;s disastrous custody proposal and demanding its withdrawal.<\/p>\n<p>\ud83d\udc47 Read more \ud83d\udd17<a href=\"https:\/\/t.co\/l9rMtwfJUy\" target=\"_blank\">https:\/\/t.co\/l9rMtwfJUy<\/a> <a href=\"https:\/\/t.co\/4rzG5etjON\" target=\"_blank\">pic.twitter.com\/4rzG5etjON<\/a><\/p>\n<p>&mdash; Financial Services GOP (@FinancialCmte) <a href=\"https:\/\/twitter.com\/FinancialCmte\/status\/1656744320928555008?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">May 11, 2023<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p style=\"text-align: justify\">According to their letter, <strong>the new regulation would apply to assets that are not under the agency&#8217;s jurisdiction<\/strong>, such as <em>&#8220;art, cash, commodities, and nontraditional assets.&#8221;<\/em> This might possibly infringe on the authority of other regulators by imposing custody requirements on organizations that are already subject to custody procedures regulated by a separate regulatory agency.<\/p>\n<p style=\"text-align: justify\">Additionally, the Financial Committee leadership considers that the Proposed Rule would reduce the required level of negligence for indemnification from gross negligence to simple negligence, which would represent a significant departure from traditional custody practice and impose significant new costs on qualified custodians.<\/p>\n<p style=\"text-align: justify\"><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone wp-image-139146 size-full\" src=\"https:\/\/crypto-economy.com\/wp-content\/uploads\/2023\/05\/SEC-on-Digital-Assets.jpg\" alt=\"Finance Committee views proposed rulemaking as SEC malfeasance\" width=\"825\" height=\"300\" srcset=\"https:\/\/crypto-economy.com\/\/wp-content\/uploads\/2023\/05\/SEC-on-Digital-Assets.jpg 825w, https:\/\/crypto-economy.com\/\/wp-content\/uploads\/2023\/05\/SEC-on-Digital-Assets-300x109.jpg 300w, https:\/\/crypto-economy.com\/\/wp-content\/uploads\/2023\/05\/SEC-on-Digital-Assets-768x279.jpg 768w\" sizes=\"(max-width: 825px) 100vw, 825px\" \/><\/p>\n<h2 style=\"text-align: justify\">The Committee asks SEC to withdraw its proposed rule<\/h2>\n<p style=\"text-align: justify\">As such, Patrick McHenry, French Hill, and the Subcommittee Chairs are cooperatively demanding the SEC rescind its <em>&#8220;disastrous custody proposal,&#8221;<\/em> saying in the letter that;<\/p>\n<p style=\"text-align: center\"><em>&#8220;We urge the SEC to withdraw the Proposed Rule and reconsider its approach to regulating entities outside of its jurisdiction.&#8221;<\/em><\/p>\n<p style=\"text-align: justify\">If this regulation is enforced, it will not only restrict smaller startups from engaging in digital asset custody, <strong>but it will also prohibit many major institutions from offering the service at scale.<\/strong><\/p>\n<p style=\"text-align: justify\">As stated,<strong> the Proposed Rule will have an excessive effect on digital asset market participants,<\/strong> given that entrepreneurs and enterprises in the ecosystem already struggle to find banks willing to store their assets.<\/p>\n<p style=\"text-align: justify\">This could ultimately hinder innovation and growth in the digital asset industry, as well as limit access to custody services for smaller players.<b> That is why many industry participants are calling on the SEC to create a platform that will foster innovation in this rapidly evolving space while also protecting investors<\/b>.<\/p>\n<p style=\"text-align: justify\">Among those resisting the SEC&#8217;s proposed rule are the Blockchain Association and a16z, which recently <a href=\"https:\/\/crypto-economy.com\/crypto-community-fights-back-against-proposed-sec-custody-rules\/\" target=\"_blank\" rel=\"noopener\">filed letters<\/a> with the regulator stating, among other things, that the proposal is another misguided attempt to wage war on the crypto industry.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Patrick McHenry, Chair of the House of Representatives Financial Services Committee, along with six other subcommittee chairs, expressed their dissatisfaction with the SEC&#8217;s proposed advisory client custody rule to (SEC) Secretary Vanessa Countryman in a letter.<\/p>\n","protected":false},"author":26,"featured_media":139144,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[88,84,74],"tags":[4816],"_links":{"self":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts\/139117"}],"collection":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/users\/26"}],"replies":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/comments?post=139117"}],"version-history":[{"count":0,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts\/139117\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/media\/139144"}],"wp:attachment":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/media?parent=139117"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/categories?post=139117"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/tags?post=139117"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}