According to Foresight News, Chairman of the U.S. House of Representatives Financial Services Committee Patrick McHenry and Chairman of the Subcommittee on Digital Assets, Financial Technology and Inclusion French Hill issued a comment letter to the U.S. Securities and Exchange Commission (SEC) and stated that the SEC’s proposed custody rules will dissuade companies. Acted as a qualified custodian for an RIA (Registered Investment Advisor) and exceeded the Commission's statutory authority to request that the SEC withdraw its proposed rule and comply with its statutory authority.
Additionally, the letter states that “the proposed rules will have a dramatic impact on digital asset market participants, as entrepreneurs and companies in the ecosystem are already struggling to find banks willing to custody their assets. Recent joint statements from federal bank regulators discourage Federally chartered banks hold digital assets and do not even hold the deposits of digital asset companies. Therefore, many digital asset companies choose to have their assets custody at state-chartered banks and trusts. Therefore, the proposal regarding whether qualified custodians should be limited to federal The issue of chartered entities is very concerning, especially as it applies to digital assets. More broadly, restricting state-chartered banks and trusts from acting as qualified custodians would only further entrench existing businesses and prevent the need for our banking industry Competition. In addition, under the post-merger rules, banks serving as qualified custodians must not only fully compensate losses of digital assets, but also keep digital assets on their balance sheets and capitalize them. Not only is this too onerous, And the costs are extremely high and may prevent large, established, qualified custodians from providing custody services for digital assets in the form of public company banks.”
