SEC Commissioner Hester Peirce again criticizes regulator’s cryptocurrency custody rules

BlockBeats news, on April 3, Cointelegraph reported that U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce once again criticized the regulator’s cryptocurrency custody rules while calling for greater interaction with the public. In March 2022, the SEC issued SAB 121, which outlines the regulator’s accounting standards for institutions seeking to custody crypto assets. SAB 121 prohibits many banks from custody of crypto assets on behalf of their customers. Hester Peirce noted that SAB 121 (issued without the involvement of the banking industry) does not protect investors, but rather excludes banks and broker-dealers from the cryptocurrency custody business due to its capital implications. Additionally, if the custodian becomes insolvent, the assets may be deemed to belong to the insolvent entity rather than to that entity's customers.