SEC to Make It Harder for Hedge Funds to Work With Crypto Firms: Bloomberg

The rule change would make it harder for crypto firms to become "qualified custodians," according to the report.

AccessTimeIconFeb 14, 2023 at 1:30 p.m. UTC
Updated Feb 14, 2023 at 7:22 p.m. UTC

The U.S. Securities and Exchange Commission (SEC) is planning to propose rule changes that would make it harder for hedge funds, private equity firms and pension funds to work with crypto firms, Bloomberg reported on Tuesday.

The SEC would make it harder for crypto firms to be “qualified custodians" or companies that hold client assets for money managers, Bloomberg reported, citing people familiar with the matter.

The U.S. regulator has been increasing its scrutiny of crypto and recently went after stablecoin issuer Paxos and its BUSD stablecoin. The crypto industry has been reeling from the collapse of crypto exchange FTX, which has drawn the ire of global regulators.

The SEC was not immediately available for comment when contacted by CoinDesk.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Parikshit Mishra

Parikshit Mishra is CoinDesk's Deputy Managing Editor responsible for breaking news coverage. He does not have any crypto holdings.

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.