The SEC is making it difficult for the cryptocurrency market to bring a wrench into the lending market
The US Securities and Exchange Commission (SEC) is reportedly making things more complicated for lenders in the crypto industry with some of its guidelines.
As reported by Reuters, several major lenders such as US Bancorp, Goldman Sachs, and JPMorgan Chase & Co are having a hard time entering the digital asset space due to the SEC's policy on crypto lending.
Earlier this year, the SEC published a set of guidelines instructing crypto companies to begin treating user funds as their own debt on their balance sheets.
In the March 31 SEC bulletin, it said:
“While Entity A is responsible for safeguarding crypto assets held for users of its platform, including maintaining key cryptographic information needed to access crypto assets, employees believes that Entity A should present a liability on its balance sheet to reflect its obligation to protect crypto assets held for users of its platform."
According to Reuters, strict capital rules require banks to hold cash against liabilities on their balance sheets.
Reuters sources also say that the policy has created a "major wrench" for the industry, with lenders developing crypto services having to halt the continuation of its plans them while this industry will take any further action. SEC and banking regulators.
Nadine Chakar, Director of State Street Digital, said:
“We have a problem with the premise of doing that, because this is not our property. This should not be on our balance sheet. "
A Bancorp U.S. spokesman told Reuters the bank will continue to serve existing customers in its Bitcoin custody service, but will suspend any additional customers while the company evaluates its service's legal situation.
Sep 19, 2022