SEC's April 25 Roundtable to Tackle Crypto Custody with Kraken, Anchorage Leaders

The U.S. Securities and Exchange Commission (SEC) is set to host its third crypto policy roundtable on April 25, 2025, focusing on the complex issue of crypto custody, as announced by the agency. Titled "Know Your Custodian: Key Considerations for Crypto Custody," the event will bring together industry leaders from Kraken, Anchorage Digital, Exodus, WisdomTree, and Fireblocks to discuss regulatory challenges with SEC Commissioners Hester Peirce, Caroline Crenshaw, and Acting Chair Mark Uyeda. Following the SEC's shift toward a more collaborative regulatory approach under the Trump administration, this roundtable aims to address critical custody issues for digital assets.

According to the SEC, the roundtable will take place at its headquarters in Washington, D.C., from 1 p.m. to 5 p.m. ET and will be open to the public. The agenda includes two expert panels: one on broker-dealer and wallet custody, featuring Kraken's Vice President of Consumer Business and Product Mark Greenberg and Anchorage Digital Bank's Head of Global Operations Rachel Anderika, and another on investment adviser and company custody, with representatives from Simpson Thacher & Bartlett LLP, WisdomTree, and 1kx. Exodus Chief Legal Officer Veronica McGregor will also participate in the roundtable.

Commissioner Hester Peirce, leader of SEC's Crypto Task Force, emphasized the importance of the discussion in April 16 notice, stating, "t 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."

Crypto custody refers to the secure storage and management of digital assets, such as Bitcoin and Ethereum, on behalf of clients, ensuring protection against theft, loss, or unauthorized access. Custody is a cornerstone of investor confidence, particularly for institutional players entering the crypto market through vehicles like exchange-traded funds (ETFs). Robust custody frameworks are essential for integrating crypto into traditional finance, where strict regulations govern asset safeguarding.

In 2023, SEC proposed Safeguarding Advisory Client Assets rule under former Chair Gary Gensler, mandate that registered investment advisers (RIA) hold client crypto assets with "qualified custodians," such as chartered banks or regulated entities, and segregate them from firm assets. These rules aim to protect investors by ensuring assets are secure and accessible, even if a custodian fails. However, the proposal faced criticism for its restrictive definition of qualified custodians, which excluded many crypto-native firms and raised compliance costs, as noted by a16z in a recent letter to the SEC.

In the letter on April 9, a16z indicates RIAs should be able to hold crypto assets directly, under specific conditions and within well-defined safeguards. The company clarified that "the self-custody of crypto assets by RIAs would not conflict with the Custody Rule or fiduciary duties." On April 17, a16z also wrote a post outlining five core "Crypto Custody Principles" to offer roadmaps and advices for reforming crypto custody rules while protecting investors.

The rules impact investment advisers, broker-dealers, and exchanges, potentially limiting market access for smaller players while encouraging traditional institutions like BNY Mellon to enter the custody space. The roundtable's outcomes is expected to reshape these requirements, balancing investor protection with industry innovation.