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Technology
SEC's New Crypto Custody Rules Cast Uncertainty Over DeFi Vaults
✍️ Asianet Newsable
🗓 03 Oct 2026, 05:48 PM
👁 17
The U.S. Securities and Exchange Commission’s latest proposal on crypto custody has raised concerns among DeFi vault operators, according to counsel from asset manager Bitwise.
The Securities and Exchange Commission (SEC) has unveiled a new set of rules aimed at tightening oversight of crypto custody services. The proposal, which is still in draft form, would require custodians to register with the SEC and comply with stricter reporting and security standards.
Industry analysts warn that the new requirements could make it difficult for decentralized finance (DeFi) vaults to operate within the regulatory framework. DeFi vaults, which rely on smart contracts and community governance, may struggle to meet the custodial obligations that the SEC is proposing.
Bitwise Asset Management’s counsel, speaking to reporters, said the proposal leaves DeFi vaults “in limbo,” as they are unsure whether they can qualify as regulated custodians or must seek alternative arrangements.
The crypto community is closely monitoring the SEC’s next steps, with many calling for a clearer path that balances investor protection with the innovative nature of DeFi platforms.
Industry analysts warn that the new requirements could make it difficult for decentralized finance (DeFi) vaults to operate within the regulatory framework. DeFi vaults, which rely on smart contracts and community governance, may struggle to meet the custodial obligations that the SEC is proposing.
Bitwise Asset Management’s counsel, speaking to reporters, said the proposal leaves DeFi vaults “in limbo,” as they are unsure whether they can qualify as regulated custodians or must seek alternative arrangements.
The crypto community is closely monitoring the SEC’s next steps, with many calling for a clearer path that balances investor protection with the innovative nature of DeFi platforms.