- Bitwise’s general counsel welcomed the SEC’s crypto custody proposal but said important questions about DeFi remain unresolved.
- The proposed rule would allow self-custody of crypto assets when no qualified custodian is available, with strict safeguards in place.
- Morgan Stanley launched a Digital Asset Lab to test DeFi vaults, an area the SEC’s rule does not fully address.
- Spot Bitcoin ETFs drew over $102 million on Thursday and $120 million on Friday, even as Bitcoin’s price fell nearly 2%.
Bitwise General Counsel Johanna Collins-Wood welcomed the Securities and Exchange Commission’s crypto custody proposal on Friday, calling it a thoughtful solution to years-old problems for asset managers, but said critical questions about decentralized finance remain. The SEC’s proposal, announced Thursday, creates a tailored framework for registered investment advisers and regulated funds to custody crypto assets, allowing self-custody under Rule 223-1(b)(7) when no qualified custodian is available.
Collins-Wood said on X the framework “thoughtfully addresses problems crypto asset managers have faced since 2017.” She noted that SEC Chairman Paul S. Atkins described the rules as replacing “the grey of uncertainty created by custody rules crafted for a bygone era.”
However, Collins-Wood identified a critical gap: the proposal rests on an assumption built around wallets and addresses. She explained that vaults running on smart contracts fall outside that framework, leaving DeFi questions unresolved.
The SEC invited discussion through questions 171 to 180 covering DeFi, staking, and receipt tokens. Comments are due 60 days after publication in the Federal Register.
Morgan Stanley announced Tuesday it set up a Digital Asset Lab partly to test DeFi vaults. Its digital assets head called them an area of particular interest but cautioned the technology was “too nascent to risk the firm’s wider platform.”
Spot Bitcoin ETFs drew over $102 million on Thursday and $120 million on Friday, according to SoSoValue data. Bitcoin’s price fell nearly 2% over 24 hours, with retail sentiment turning bearish.
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