Eastern Standard Time, January 4th, the U.S. Securities and Exchange Commission (SEC) officially released new asset custody regulations aimed at banks and broker-dealers, requiring stricter accounting treatment and capital requirements for customer custody assets, including crypto assets, which has drawn significant attention from the crypto industry and traditional financial institutions. This change marks the beginning of U.S. regulators reshaping "who is qualified to safely custody crypto assets" in the wake of the collapse of large platforms like FTX, potentially raising compliance thresholds and reshaping market trust structures regarding different custody models.

Simultaneous Tightening of Accounting and Capital Rules

● Core content of the new regulations: The SEC requires regulated banks and broker-dealers to conduct more prudent recognition and disclosure of crypto assets held in custody for clients on their balance sheets, converting assets that were previously "off-balance sheet, for reference only" into on-balance sheet items reflecting corresponding risk exposures, and requiring matching capital allocations.
● Regulatory goals: By increasing risk weights and capital requirements, the SEC aims to constrain the expansion pace of financial institutions in crypto custody business using a framework similar to that for traditional high-risk assets, preventing the emergence of a "zero capital, fully custodial" high-leverage hidden risk structure.
● Scope of application: The new regulations cover licensed banks, broker-dealers, and certain custodians subject to SEC or federal banking regulatory oversight. While unlicensed crypto exchanges and overseas platforms are not directly applicable, they will face "compliance premium" pressure when competing with licensed institutions.
● Practical impact: For banks that have already taken on large-scale institutional crypto custody business, audited asset sizes will significantly increase due to the on-balance sheet treatment of client crypto assets, putting pressure on capital adequacy ratios and forcing them to compress some lines of business that have low yields but high capital requirements.
● Disclosure requirements: The SEC has simultaneously strengthened risk disclosure related to crypto asset custody, including dimensions such as technical security, private key management, third-party dependencies, and legal ownership disputes, requiring institutions to explain potential risks to investors and regulators in greater detail.

Repricing of Custody Business Costs for Banks

● Increased capital costs: As the custody of crypto assets requires higher risk weights, the amount of Tier 1 capital banks need to allocate for each unit of custody scale rises, causing what was once viewed as a "light asset, low allocation" custody business to become "heavy," forcing adjustments to pricing models.
● Changes in fee structures: To cover the new capital costs, compliance audit fees, and investments in technical security, banks are likely to raise custody fee rates or introduce tiered charges, such as higher rates for high-frequency transfers or high-risk asset portfolios.
● Differentiation in client structure: High-net-worth and large institutional clients have a stronger ability to bear costs and are more motivated to pay a premium for "regulated custody"; small and medium-sized institutions and retail investors may be forced to weigh costs against trust, with some demand potentially being taken on by non-U.S. or unlicensed custodians.
● Limitations on product innovation: Under stricter accounting and capital constraints, banks will be more cautious in designing structured notes, yield swaps, and other derivatives or yield-enhancing products related to crypto assets, slowing the pace of innovation and prioritizing controlled capital allocation.
● Economies of scale threshold: Only banks with sufficiently large management scales and strong capital strength can dilute compliance and audit costs in the new regulatory environment, objectively raising the threshold for new entrants and reinforcing the relative advantages of leading institutions.

Restructuring of Custody Models and Market Trust

This regulatory tightening is not an isolated event but a systemic correction against the backdrop of the collapse of centralized platforms like FTX. Previously, the market adopted a highly pragmatic attitude towards "who should custody crypto assets," rarely questioning the custody model as long as the platform provided liquidity and returns. The FTX incident thoroughly exposed the significant gray area of mixed use of proprietary trading and client assets, making "the risk of the custodian's own balance sheet" a new core concern. By forcing banks to reflect crypto custody risks on their balance sheets, the SEC is effectively requiring traditional financial institutions to assume clearer legal and capital responsibilities, thereby attaching a stronger safety label to "bank custody." This label, on one hand, reinforces the credit endorsement of traditional institutions, while on the other hand, it implicitly suppresses the trust space for unregulated custodians. Meanwhile, interest in self-custody and on-chain custody tools has not diminished due to regulatory tightening; rather, following the risks associated with large platforms, some institutions have begun adopting a "layered custody" strategy: entrusting core long-term holdings to regulated banks to meet compliance and audit requirements, while placing high liquidity or high-risk strategy funds in on-chain multi-signature or professional third-party custody to enhance flexibility and diversify reliance on a single custodian. The rise of this hybrid custody structure indicates that market trust is no longer solely betting on one type of custody vehicle but is instead constructing multi-dimensional safety redundancies through a combination of different custody models.

Intensifying Industry Disputes and Regulatory Games

Divergent views within the market have quickly emerged around the SEC's new regulations. Some institutional investors and compliance advisors believe that increasing capital requirements and accounting transparency will accelerate the elimination of platforms with mixed asset use and weak internal controls, paving the way for true institutionalization and attracting more conservative capital into the crypto asset space in the medium to long term. For these participants, being willing to pay higher fees for regulated bank custody is a necessary cost for legal protection and regulatory backing. However, crypto-native enterprises and some technologists are wary that the new regulations may lead to a de facto "regulatory monopoly" by traditional financial institutions in the crypto space, leveraging capital strength and licensing advantages to occupy the high ground of custody, thereby reintroducing decentralized assets into a highly centralized custody framework. This group is concerned that the high standards imposed on banks by regulators are not equivalently applied to other traditional intermediaries, but rather push unlicensed innovative custody models into a regulatory gray area, weakening the space for open competition. Additionally, some market participants with a neutral stance emphasize that in the short term, the new regulations will indeed raise compliance costs and compress profit margins, but they may also force traditional institutions to optimize the cost structure of custody business, promoting the implementation of more efficient multi-chain custody technologies and risk management tools, ultimately forming a "smaller but more refined" compliant custody ecosystem.

Future Regulatory Pathways and Market Evolution Observations

In the short term, the market will continue to focus on several key points: first, how major U.S. banks and broker-dealers specifically disclose crypto custody assets and related capital allocations during the annual report season; second, whether any institutions will reduce or postpone the expansion of crypto-related businesses as a result; and third, whether regulatory agencies in other jurisdictions will reference the SEC's path and initiate similar adjustments to accounting and custody rules. If Europe or certain Asia-Pacific financial centers follow suit, it would mean that the "high capital allocation + strict disclosure" model becomes a global regulatory consensus for institutional custody of crypto assets. Against this backdrop, structural changes in the crypto industry may gradually emerge over the next year: traditional financial institutions may further consolidate their influence in the large institutional custody space, while decentralized custody tools and on-chain solutions may have the opportunity to cater to cost-sensitive demands seeking asset control. Investors need to closely monitor whether regulation will continue to advance along the path of "custody first, then touching on trading and clearing," as once the institutional design of custody stabilizes, the regulatory transformation of exchanges, brokers, and derivatives clearing will also accelerate, embedding the entire crypto market's infrastructure more deeply into the traditional financial regulatory system.

Join our community to discuss and grow stronger together!
Official Telegram community: https://t.me/aicoincn
AiCoin Chinese Twitter: https://x.com/AiCoinzh

OKX Benefits Group: https://aicoin.com/link/chat?cid=l61eM4owQ
Binance Benefits Group: https://aicoin.com/link/chat?cid=ynr7d1P6Z

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。