The U.S. Securities and Exchange Commission (SEC) has issued guidelines for cryptocurrency custody.
PANews reported on December 14 that, according to Cointelegraph, the U.S. Securities and Exchange Commission (SEC) released an investor bulletin on Friday outlining best practices and common risks associated with different cryptocurrency storage options for cryptocurrency wallets and custody.
The announcement outlines the advantages and disadvantages of different cryptocurrency custody options, including self-custody versus entrusting a third-party institution to hold digital assets on behalf of investors. If investors choose third-party custody, they should understand the custodian's policies, such as whether they "re-collateralize" custodied assets through lending, or whether the service provider pools client assets in a single fund pool instead of storing cryptocurrencies in separate client accounts. The guide also outlines the types of cryptocurrency wallets and analyzes the advantages and disadvantages of connected hot wallets and offline cold wallets.
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