A Securities and Exchange Commission (SEC) guide for retail investors on how to safely store crypto underscores how the regulator has shifted from years of [...A Securities and Exchange Commission (SEC) guide for retail investors on how to safely store crypto underscores how the regulator has shifted from years of [...

SEC Crypto Custody Guide Underscores Shift From Gensler-Era Enforcement

2025/12/14 21:57

A Securities and Exchange Commission (SEC) guide for retail investors on how to safely store crypto underscores how the regulator has shifted from years of strict enforcement to investor education.

In a Dec. 12 Investor Bulletin, the regulator outlined the pros and cons of different methods of crypto custody, examining everything from self-custody to third-party custodians, hot versus cold wallets and private versus public keys.

”The SEC is now publishing educational guides on crypto wallets for investors,” said user TFTC on X. “The same agency that spent years trying to shut down the industry is now teaching people how to use it.”

The guide came a day after SEC Chair Paul Atkins said US financial markets ”are poised to move on-chain,” adding that under his leadership the SEC is ”prioritizing innovation and embracing new technologies to enable this on-chain future, while continuing to protect investors.

SEC Provides Practical Advice On Safe Crypto Custody

The SEC’s guide provides an overview of types of crypto asset custody and provides tips and questions to help investors decide how to best hold crypto assets.

It notes, for example, that if investors go for a third-party custodian, they should first ensure that they are familiar with the current custodian’s policies.

This includes 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 having the crypto in segregated customer accounts.

The guide also lists crypto wallets, breaking down the pros and cons of hot wallets connected to the internet, and offline storage in cold wallets.

As illustrated by the SEC, hot wallets carry the risk of hacking and other cybersecurity threats. In contrast, cold wallets carry the risk of permanent loss if the offline storage fails, a storage device is stolen, or the private keys are compromised.

Jake Claver, the CEO of Digital Ascension Group, said that the SEC is providing “huge value” to crypto investors by educating prospective crypto holders about best practices in custody.

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