SEC’s Crypto Custody Crackdown: What’s at Stake?

EC Gears Up for Crypto Custody Debate in Upcoming Roundtable

The U.S. Securities and Exchange Commission (SEC) is intensifying its push to regulate the crypto industry and next up on the agenda is one of the most complex topics yet: crypto custody.

As part of its ongoing five-part public roundtable series, the SEC is set to host a major discussion on April 25 titled “Know Your Custodian: Key Considerations for Crypto Custody.” The event, which will be held at the SEC headquarters in Washington, D.C., is the third session in what the agency calls its “Spring Sprint Toward Crypto Clarity.”

This roundtable will shine a spotlight on how digital assets are securely stored, who gets to hold them, and what rules need to be in place to protect investors and maintain integrity in crypto markets.

Why Crypto Custody Matters

Crypto custody isn’t just about storing coins in a digital wallet it’s about safeguarding billions of dollars' worth of assets. For regulators like the SEC, custody is a critical piece of the puzzle when it comes to investor protection.

Custody defines who holds the keys to crypto assets, who can authorize transfers, and how risk (like hacks or insider theft) is managed. In traditional finance, custodian banks have long played this role. But in crypto, the lines are blurrier, and the stakes are higher.

“Custody is one of the most challenging areas in crypto regulation,” said SEC Commissioner Hester Peirce, who is leading the Crypto Task Force behind these roundtables. “We need to understand how these systems work before we can effectively regulate them.”

Who’s Speaking at the Roundtable?

The event is expected to draw top minds from across the crypto and finance industries.

The first panel will feature heavy hitters in the custody game, including:

- Fireblocks
 

- Anchorage Digital Bank
 

- Fidelity Digital Asset Services
 

- Kraken
 

- Exodus Movement
 

- Etana Custody
 

- Copper Technologies
 

The second panel will focus on legal and academic perspectives, bringing in experts like:

- Adam Levitin, Georgetown University Law Center

 

- Charles Mooney, University of Pennsylvania

 

- Other legal and investment professionals
 

Both panels will be moderated by Zach Zweihorn from the law firm Davis Polk & Wardwell LLP, who has advised on several high-profile crypto matters.

Key Topics Up for Discussion

While the agenda hasn't been fully revealed, a few hot-button topics are expected to dominate the conversation:

- How crypto custodians should be regulated under current securities laws
 

- Differences between self-custody and third-party custody
 

- The role of banks vs. non-bank entities in holding digital assets
 

- Security standards for safeguarding customer funds
 

- Insurance requirements and liability in the event of loss or theft
 

- Cross-border custody issues for global crypto firms
 

These discussions could have wide-ranging implications, especially for crypto exchanges, wallet providers, and institutions managing digital assets.

Previous Roundtables and What’s Coming Next

This isn’t the SEC’s first deep dive into crypto this year. The roundtable series launched on March 21 with a session on the definition of digital asset securities, a foundational issue for determining which tokens fall under the SEC’s jurisdiction.

The second roundtable, held on April 11, tackled regulatory challenges for crypto trading platforms, including decentralized exchanges (DEXs).

The April 25 custody session marks the halfway point in the series. Two more events are scheduled:

- May 12: A session exploring tokenization and how blockchain-based assets interact with traditional finance systems.

 

- June 6: A capstone event titled “DeFi and the American Spirit,” which will dive into the ethos of decentralized finance and its alignment with U.S. economic principles.
 

All roundtables are open to the public and will be livestreamed on the SEC’s website. Those interested in attending in person can do so with prior registration.

The Bigger Picture: Crypto's Regulatory Reckoning

The SEC has faced increasing pressure to bring more clarity to crypto regulation especially after a string of bankruptcies, fraud cases, and security breaches rocked the digital asset market over the last two years.

With these roundtables, the Commission is signaling that it’s not just planning to regulate crypto in isolation it wants input from the industry and legal experts to get it right.

That said, critics argue that the SEC’s approach is still too cautious, sometimes leaving companies in regulatory limbo. Some crypto advocates have even called for Congress to step in and create dedicated digital asset legislation rather than relying on old securities laws.

But until that happens, events like this custody roundtable will help shape how crypto fits into the existing U.S. regulatory framework.

Final Thoughts

Crypto custody might sound like a technical detail, but it’s a core issue that could determine the future of digital finance. The SEC’s April 25 roundtable promises to be a major step in the ongoing effort to bring clarity and accountability to the crypto world.

With high-profile speakers, legal powerhouses, and open participation, this discussion could lay the groundwork for future regulations that protect users without stifling innovation.

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