Washing machine
May 28, 2025
The staff of the Division of Exchange and Markets of the American Commission for Securities and Exchange published on May 15, 2025 answers to frequently asked questions concerning cryptographic asset activities and the technology of the great distributed book. The FAQs provide advice on the custody of crypto assets by brokers and use by blockchain transfer agents to maintain the files of the security master.
Simultaneously, the staff and the office of the Advocate General of the Financial Industry Regulatory Authority, Inc. (FINRA) announced the withdrawal, with an immediate effect, of a joint declaration (the joint press release) published by the staff in July 2019 concerning the guard of the Cryptographic Active Carrier.
The emission of the FAQ and the withdrawal of the joint staff declaration are part of the dry plan to clarify the regulatory treatment of various cryptography activities (1). On May 19, the president of the SEC, Paul Atkins, made remarks at the SEC Speaks conference and said that he had “directed the staff of the Commission through the political divisions (the SEC) to start writing proposals for rules related to the crypto, (and) the personnel continues to erase the brush” through statements at the level of staff “.
The joint declaration withdrawn had previously described significant challenges and risks associated with brokers for the custody of cryptographic asset securities, noting difficulties in respecting certain federal laws on securities. The FAQs clarify the application of certain federal laws on securities to cryptographic asset titles.
FAQ on the activities of cryptographic assets and the technology of the big book distributed
The FAQs provide advice on cryptographic assets for brokers and transfer agents. A summary of personnel answers to certain frequently posed questions of the industry is as follows:
Broker’s financial responsibility
- Paragraph b) of rule 15C3-3 under the EXCHANGE ACT SECURITIES of 1934 (the customer protection rule) does not apply to cryptographic assets which are not titles; It only applies to the securities transported by a broker for customer accounts or the owner accounts of other brokers.
- A broker can establish the control of a cryptographic asset which is a guarantee as envisaged by paragraph c) of the customer protection rule, even if the asset is not in certified form, as long as it is held at a place of eligible control.
- Compliance with the declaration of the Special Broker of the Commission in 2020 (SPBD) is not compulsory for brokers who seek to hold cryptographic assets of customers who are titles. The SPBD declaration provides a temporary port but does not change the customer protection rule.
- Police custody and the capital requirements of the broker does not prohibit facilitating creations and redemptions in kind in relation to a product translated in exchange for crypto (ETP), but proper positions in the assets underlying an ETP must be taken into account in the net net calculations of a broker. To this end, a broker may deal with a proprietary position in bitcoin or ether as being easily marketable for determining whether the 20% haircut applicable to basic products under appendix B of the law on exchange 15C3-1 applies.
- Cryptographic assets which are investment contracts are not treated as securities under the SECURITIES Investor Protection Act of 1970 unless they are subject to a registration declaration filed under the ACT Securities of 1933.
- The Securities Investor Protection Corporation (SIPC) does not protect customer complaints for cryptographic assets of non-security held by a member broker of SIPC.
- In an effort to ensure the return of non-security cryptography assets If a broker becomes insolvent, a broker can agree with customers to treat these assets as “financial assets” under article 8 of the uniform commercial code.
- In order to maintain adequate files, brokers that carry out non-security companies of cryptography assets should maintain recordings similar to those kept for securities activities to ensure the protection of investors and facilitate audits or exams.
Transfer agents
- A Person Acting As A Transfer Agent for An Issuer of A Crypto Asset That is a Security May be required to register with the sec if they perform any of the five enumerated activities defined in section 3 (a) (25) of the exchange act (2) with respect to a security that is registered under section 12 of the exchange act or Which WOULD be required to be registered Exception for the exemption from registration provided by section 12 (g) (2) (b) or section 12 (g) (2) (2) g) of the law on exchange (i.e. certain titles issued by an investment company recorded or an insurance company).
- A registered transfer agent can use the technology of the large distributed book because his official master’s security holder provided that he complies with all applicable federal laws and requirements. Transfer agents can maintain transaction information on a blockchain while keeping personal information outside the chain as long as the recordings are secure, exact, updated and produced at the Commission in an easily readable format.
At the end of the FAQ, the staff encouraged the industry to engage with the staff, to ask questions and to request assistance concerning the application of the broker and the rules of the commission transfer agents to the activities of cryptographic assets and to the technology of the large distributed book.
Dry and finished withdraw the joint declaration of the staff
On the same day that the FAQ was published, the staff and the Finra announced the immediately effective withdrawal of the joint press release published by the staff on July 8, 2019 concerning the guard of the broker of cryptographic assets. The FAQs express a much more flexible approach to the warning of cryptographic assets than the joint press release of the staff, which had put a significant doubt on the capacity of a broker to relax cryptographic assets in accordance with the requirements of customer protection and other rules.
CONCLUSION
The FAQs offer a welcome clarity to brokers and transfer agents on the application of various laws and rules to the securities of cryptographic assets. The publication of the FAQ and the withdrawal of the joint declaration of the staff follow the declarations made by the staff of the SEC according to which he intends to move away from the app and ad hoc advice and towards the implementation of a more formal, structured and rational regulatory landscape for cryptographic assets.
