On 15 May 2025, the US Securities and Exchange Commission’s Division of Trading and Markets (Division) released Frequently Asked Questions (FAQs) clarifying how certain broker-dealer and transfer agency rules relate to crypto asset activities. On the same day, the Division and FINRA’s Office of General Counsel withdrew their 8 July 2019 Joint Statement on Broker-Dealer Custody of Digital Asset Securities.

In the context of spot crypto exchange-traded products (ETPs), the FAQs address the Division’s views about broker-dealer custody rules in the context of in-kind creations and redemptions, noting that the possession and control requirements in Rule 15c3-3 under the Securities Exchange Act of 1934 are not triggered if non-security crypto assets are held for customers, but broker-dealers taking proprietary positions in the assets underlying an ETP must account for them as part of their net capital calculations. The Division also stated it would “not object” if broker-dealers were to treat a proprietary position in bitcoin or ether as being readily marketable for purposes of determining whether the 20% haircut applicable to commodities applies. The FAQs also clarified that:

• A broker-dealer can establish control of a crypto asset that is a security under Rule 15c3-3(c), even if it isn’t in certificated form, when held at an otherwise qualifying control location; and
• Crypto assets that are investment contracts that aren’t the subject of a registration statement filed under the Securities Act of 1933 aren’t treated as securities under the Securities Investor Protection Act of 1970 (and aren’t protected by Securities Investor Protection Corporation).

However, not all answers are “yes” or “no.” For example, whether a transfer agent for a crypto asset security is required to register as a transfer agent with the SEC depends on the type of security and the services, functions or activities provided with respect to it.