The US SEC giveth and taketh away By Cointelegraph

On Dec. 23, 2020, the SEC published a statement proposing a framework for broker-dealers to custody digital asset securities in a manner consistent with Rule 15c3-3 under the Securities Exchange Act of 1934. Among other things, the statement, which will expire after a period of five years from publication, provides that a broker-dealer may custody digital asset securities so long as it operates consistent with the enumerated conditions set forth in the statement, including but not limited to, restricting its business exclusively to digital asset securities, instituting robust written policies and procedures, and ensuring that it has exclusive control over custodied digital asset securities.

It is important to emphasize that this statement only offers relief to broker-dealers that limit their activities exclusively to digital asset securities, with a focus on custody of such securities. In contrast to some misinformed industry reactions to the contrary, broker-dealers wishing to custody digital asset securities are categorically prohibited from custodying non-digital asset securities such as (BTC) — or for that matter engaging in any non-digital asset securities activity of any kind. Of course, while clearly not the motivating factor behind the SEC’s prohibition on non-securities digital asset business activity, a broker-dealer that is to engage in such activity would be subject to various state money transmitter licensing requirements.