Mark Uyeda shared that there are significant challenges surrounding the proposed crypto custody rule introduced during Gary Gensler’s tenure. Following feedback regarding its extensive scope, the SEC may explore alternatives to the rule.

Criticism from SEC commissioners and industry advocates indicates that the rule could restrict crypto investments and limit available qualified custodians. Uyeda acknowledged these concerns in his remarks at a recent investment industry conference.

Uyeda’s comments indicate a pattern of reassessing prior regulatory proposals, reflecting a shift in the SEC’s stance on crypto custody rules. This follows the previous rescindment of a rule requiring financial firms to report crypto as liabilities.