The Sandbox (sand) 
“`html
SEC to Host Crypto Custody Roundtable on April 25
The U.S. Securities and Exchange Commission (SEC) is set to hold the third session in its four-part roundtable series on April 25, focusing on crypto custody. This event will bring together key stakeholders from the digital asset industry to discuss critical considerations surrounding the custody of cryptocurrencies.
Key Details of the Crypto Custody Roundtable
The roundtable, titled “Know Your Custodian: Key Considerations for Crypto Custody,” will feature prominent voices in the crypto space. Panelists include Mark Greenberg from Kraken, Rachel Anderika of Anchorage Digital Bank, Veronica McGregor of Exodus, and representatives from Fidelity Digital Asset Services, WisdomTree, and Fireblocks. These industry leaders will share insights and perspectives on the evolving landscape of cryptocurrency custody.
Representing the SEC will be Commissioners Hester Peirce and Caroline Crenshaw, Acting Chair Mark Uyeda, and Crypto Task Force Chief of Staff Richard Gabbert. Commissioner Peirce emphasized the importance of addressing custody challenges, stating:
“It is important for the SEC to grapple with custody issues, which are some of the most challenging as we seek to integrate crypto assets into our regulatory structure.”
Previous and Upcoming Roundtables
This session is part of the SEC’s ongoing efforts to explore regulatory frameworks for digital assets. The first two roundtables, held on March 21 and April 11, focused on the classification of tokens as securities and regulations for crypto trading, respectively. Future discussions will address asset tokenization and decentralized finance (DeFi), highlighting the breadth of topics the SEC is tackling in the crypto space.
Calls for Change: Andreessen Horowitz Weighs In
On April 9, venture capital firm Andreessen Horowitz (a16z) submitted a formal letter to the SEC, urging updates to crypto custody rules to better accommodate the needs of registered investment advisers (RIAs). The firm argued that current regulations, based on the Investment Advisers Act of 1940, fail to reflect the unique characteristics of digital assets.
a16z highlighted that crypto assets often include features such as on-chain governance rights, staking capabilities, and yield-generating mechanisms. These functionalities are integral to preserving the economic utility of the assets but can become inaccessible under traditional custodial arrangements. The firm stressed the importance of enabling RIAs to fully leverage these features for their clients.
Proposed Crypto Custody Principles
In a detailed proposal, a16z outlined five key principles for crypto custody, advocating for a flexible regulatory approach that balances security with functionality. Key recommendations include:
- Allowing RIAs to work with third-party custodians that preserve governance and economic rights.
- Providing temporary guidance for RIAs to self-custody assets without violating custody rules.
- Shifting away from rigid distinctions like hot vs. cold wallets in favor of a risk-based framework to mitigate loss or theft.
The firm clarified that its goal is not to expand the scope of the SEC’s Custody Rule but to adapt its objectives—such as security, disclosure, and verification—to the unique properties of crypto assets. According to a16z:
“Our aim is not to expand the scope of the Custody Rule beyond securities but to extend its goals—security, periodic disclosure, and independent verification—to the new asset class of tokens.”
As the SEC continues its discussions on crypto custody, industry stakeholders are closely watching for regulatory developments that could shape the future of digital asset management.
“`
