US SEC Issues Crypto Asset Custody Guidelines, Systematically Outlines Wallet Types and Key Risks

ChainCatcher news, according to Cointelegraph, the U.S. Securities and Exchange Commission (SEC) issued investor guidance on crypto wallets and asset custody on Friday local time, systematically outlining the advantages and risks of different crypto asset storage methods.

The guidance compares self-custody and third-party custody models, and reminds investors to pay particular attention to whether custodians engage in asset rehypothecation or commingle client assets when choosing third-party custody. The SEC also introduced the main differences between hot wallets and cold wallets: hot wallets, being connected to the internet, face higher risks of hacking and cybersecurity threats; cold wallets can reduce the risk of online attacks, but if the storage device is damaged, stolen, or the private key is lost, it may result in permanent loss of assets. Market participants believe that this guidance indicates a clear shift in the SEC's regulatory stance toward the crypto industry.

The day before, SEC Chairman Paul Atkins stated that the traditional financial system is accelerating its migration on-chain, and the SEC has also approved DTCC to launch tokenization explorations for assets such as stocks, ETFs, and government bonds.