SEC Issues Crypto Custody Warning: Know the Risks Before You Store
The U.S. Securities and Exchange Commission (SEC) has issued new guidance urging retail investors to carefully evaluate the risks and options associated with storing digital assets. This advisory arrives as federal regulators make strides toward integrating cryptocurrency into the traditional banking system.
The SEC's bulletin highlights the critical role of private keys in crypto custody, warning that lost or compromised keys can result in irreversible asset loss. It distinguishes between hot wallets, which prioritize convenience through internet connectivity, and cold wallets, which emphasize security via offline storage.
The regulatory landscape continues to evolve, with the SEC recently dropping enforcement cases, approving tokenization pilots, and granting crypto firms national bank charters. This guidance reflects the agency's effort to balance innovation with investor protection as digital assets gain mainstream traction.
