SEC trading staff states conditions for broker-dealer possession of crypto-asset securities

What changed

Trading and Markets staff described a conditional path for broker-dealers to deem themselves in physical possession of customer crypto-asset securities, including network assessment, private-key controls, incident planning, transfer capability, and wind-down arrangements. The Division also expanded its FAQs on custody, trading, and settlement; both are staff views rather than Commission rules.

Who it affects

• Broker-dealers carrying crypto-asset securities
• Advisers and clients relying on broker-dealer custody or tokenized-security trading

What is still open

• Commission amendments to Rule 15c3-3 and treatment of non-security crypto assets
• How FINRA will examine implementations and approve material business changes

What it means for an advisor

• Require evidence of network assessment, exclusive key control, fork and airdrop procedures, lawful freeze capability, incident response, and wind-down transfer planning
• Distinguish possession, control-location, and qualified-custodian analyses across the adviser and broker-dealer regimes

Previous interpretation

The 2020 special-purpose broker-dealer framework and earlier FAQs supplied a narrower and less integrated custody path.