SEC Withdraws 2019 Crypto Custody Guidance, Issues New FAQ for Broker-Dealers

The U.S. Securities and Exchange Commission has formally rescinded its 2019 joint staff statement on digital asset securities custody, marking a significant shift in regulatory posture. The move comes alongside new guidance clarifying how broker-dealers should handle crypto assets under existing rules.

Rule 15c3-3 now explicitly differentiates between securities and non-securities crypto assets, with custody requirements applying only to the former. The SEC’s Trading and Markets Division has outlined pathways for firms to maintain control over digital asset securities even when they lack traditional certificated form.

This regulatory update suggests growing institutional acceptance of crypto assets while maintaining distinct treatment for securities versus non-securities. The immediate withdrawal of previous guidance creates both compliance challenges and opportunities for broker-dealers navigating the evolving digital asset landscape.