SEC To Reconsider Biden’s Crypto Custody Rule, Acting SEC Chair Uyeda Says

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The U.S. Securities and Exchange Commission may backtrack on a proposal to tighten cryptocurrency custody rules, marking another shift under the acting chair’s leadership, influenced by the Trump administration.

The acting head of the U.S. SEC, Mark Uyeda, announced on Monday that the agency might change or even scrap stricter rules proposed by the previous administration.

Acting Chair Cites Concerns Over A Rule

Uyeda said that there were major concerns about a rule from February 2023 that would require investment advisers to store crypto with qualified custodians. At the 2025 Investment Management Conference in San Diego, Uyeda noted the challenges in moving forward with the rule and asked SEC staff to work with the crypto task force to find better alternatives.

These rules would have forced investment advisors holding cryptocurrencies and other assets to meet stricter standards. Uyeda also revealed that the SEC is looking into altering a rule that requires mutual funds and exchange-traded funds to report their holdings monthly instead of quarterly.

Uyeda’s Focus On Rule Making

Uyeda outlined plans for a significant shift away from the approach taken by the Biden administration in overseeing Wall Street. Uyeda mainly discussed the SEC’s rulemaking process, including the possibility of withdrawing, re-proposing rules, or delaying compliance deadlines.

Uyeda emphasized that the SEC “needs to prioritize effective and cost-efficient regulations that respect the limits of our statutory authority,” as per a copy of his prepared remarks.

The custody rule, proposed during the Biden administration under Gary Gensler, would require advisers to store client assets, including crypto, with qualified custodians for added protection. This raised concerns about limiting banks willing to work with the crypto sector.

Opposition Against Crypto Custody Rule

Republicans, crypto firms, and financial companies opposed the rule, saying it could hurt their businesses. The proposal led to disagreements between Uyeda, Commissioner Hester Peirce, and industry groups, who called it unlawful and harmful. Uyeda questioned how advisers could invest in crypto under the rule, but still supported it despite some concerns. Peirce, the only commissioner to oppose the rule, said it would limit the number of qualified crypto custodians.

Uyeda’s decision to reconsider this rule is the second time this month he has asked the SEC staff to revisit proposed changes, signaling a shift in the SEC’s approach under the Trump administration.

Paul Atkins, nominated by Trump to replace Uyeda as SEC Chair, is awaiting Senate confirmation. The SEC is also under pressure from White House for staff cuts, but no details have been released.