SEC Publishes Crypto Custody and Wallet Primer for Investing Public
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The United States Securities and Exchange Commission (SEC) published a crypto wallet and custody guide investor bulletin on Friday, outlining best practices and common risks of different forms of crypto storage for the investing public. The SEC’s bulletin lists the benefits and risks of different methods of crypto custody, including self-custody versus allowing a third-party to hold digital assets on behalf of the investor. If investors choose third-party custody, they should understand the custodian’s policies, including whether it “rehypothecates” the assets held in custody by lending them out or if the service provider is commingling client assets in a single pool instead of holding the crypto in segregated customer accounts. The Bitcoin supply broken down by the type of custodial arrangement. Source: River Crypto wallet types were also outlined in the SEC guide, which broke down the pros and cons of hot wallets, which are connected to the internet, and offline storage in cold wallets. Hot wallets carry the risk of hacking and other cybersecurity threats, according to the SEC, while cold wallets carry the risk of permanent loss if the offline storage fails, a storage device is stolen, or the private keys are compromised. The SEC’s crypto custody guide highlights the sweeping regulatory change at the agency, which was hostile to digital assets and the crypto industry under former SEC Chairman Gary Gensler’s leadership. Related: SEC sends warning letters to ETF issuers targeting untamed leverage The crypto community celebrates the SEC guide as a transformational change in the agency “The same agency that spent years trying to kill the industry is now teaching people how to use it,” Truth For the Commoner (TFTC) said in response to the SEC’s crypto custody guide. The SEC is providing “huge value” to crypto investors by educating prospective crypto holders about custody and…
Filed under: News - @ December 13, 2025 10:26 pm