The US House Financial Services Committee is firmly against the SEC's proposed custody regulations.

A letter from leaders of six subcommittees, along with the Financial Services Committee chair Robert Wilson, has been sent to SEC Secretary Vanessa Countryman, highlighting their discontent with the agency's proposed custody rule for advisory clients. Many key figures in the cryptocurrency space echo this sentiment.

The Financial Services Committee has asserted that the SEC is overstepping its authority in relation to its regulations affecting registered investment advisers (RIA), specifically regarding the enhanced requirements for custodians handling client funds. SEC In their correspondence, the committee pointed out that the proposed regulation could 'ban' certain assets that fall outside the SEC's reach, such as cash, art, commodities, and other unconventional assets. It would also impose custody stipulations on entities already governed by another regulatory body.

If implemented, this rule would significantly impact participants in the digital asset market, as many entrepreneurs and firms are currently finding it difficult to secure banks willing to safeguard their assets.

The proposed limitation of qualified custodians to federally chartered institutions could create obstacles and stifle competition within the market, as discussed in the letter. Furthermore, the new ruling may interact unfavorably with Staff Accounting Bulletin 121, further complicating matters for the banking sector.

The SEC is treating cryptocurrency with high importance, as evidenced by a press release dated May 3, which announced a near doubling of resources within its Crypto Assets and Cyber Unit.

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• Nik, a skilled analyst and writer at Metaverse Post, focuses on delivering leading-edge insights into the rapidly evolving technology landscape, particularly in areas such as AI, machine learning, virtual and augmented reality, on-chain analytics, and blockchain innovation. His writing captivates a broad audience, providing them with crucial information to stay ahead in the tech realm. With a Master's degree in Economics and Management, Nik possesses a deep understanding of the business world and its intersection with emerging technologies.
• Anthony Scaramucci, Financier