SEC Eases Digital Asset Rules for Broker-Dealers, Chainlink (LINK) Recognized as a Major Development

The SEC released new guidelines on May 15 that might encourage institutions to invest in digital assets. This change details the existing securities laws that apply to

The U.S. Securities and Exchange Commission (SEC) has released new guidance that could open the door for institutions to invest in digital assets more easily.

May 15 saw the SEC update key questions on how its existing securities laws apply to broker-dealers and transfer agents in the crypto sector. Such changes see the administrative agency move to larger crypto adoption within the traditional financial industry, mainly for compliance and record management.

This change also sees the SEC continue to expand on how its existing legislation applies to the burgeoning crypto industry. The agency's Division of Enforcement has been increasing its activity in the crypto sphere. Earlier this year, the SEC sued Binance and its CEO Changpeng Zhao for allegedly defrauding investors.

Specifically, the new guidance from the SEC concerns financial organizations on how to handle crypto assets, such as Bitcoin (BTC) and Ethereum (ETH).

According to the agency, broker-dealers who hold non-security assets do not have to follow the safety requirements listed in Rule 15c3-3. This makes it easier for institutions to deal with digital assets and understand how they are governed by existing custody standards.

However, the agency also cautioned that digital assets that are not classified as securities lack SIPA (Securities Investor Protection Act) protections. This means customers may face added risks when holding non-security crypto with registered firms.

The agency is also updating the role of transfer agents in managing securities records with the use of distributed ledger technology (DLT). They are required to conform to rules and regulations, and their records must be both safe and accessible. As a result, the government can now use blockchain to verify and record information.

This development places Chainlink (LINK) in a good position. The project is in close collaboration with regulators to help decide federal policies.

The new guidelines from the SEC are a significant development for the crypto industry. They could help to accelerate the adoption of digital assets by institutions.

Chainlink recognized this as a major development for the industry. The company stated that this update addresses past problems institutions had encountered when using public blockchains for compliance.

The new guidelines designed by the SEC will help those interested in using blockchain to invest in private markets.

Chainlink contributed to the development of the new guidance from behind the scenes. In March, members of Chainlink Labs attended gatherings with the SEC’s Crypto Task Force. The sessions proved how smart contracts and privacy technologies can comply with securities regulations. The content of this guide apparently contributed to including terms such as “unified golden records” and “smart-contract-driven compliance” in the updated SEC guidance documents.