Chandra Wibowo
The global regulatory landscape for digital assets is undergoing significant shifts, with key developments in the United States and Europe signaling a more defined and potentially more accessible, yet also more scrutinized, environment for crypto firms and investors. In the United States, the Securities and Exchange Commission (SEC) has taken a step towards alleviating a long-standing operational hurdle for investment advisers seeking to offer cryptocurrency services to their clients. Simultaneously, two states with historically divergent approaches to digital assets, New York and Wyoming, have announced a landmark agreement to coordinate their oversight of crypto companies, aiming to streamline regulatory processes and enhance inter-state cooperation. Across the Atlantic, European regulators are reportedly intensifying their examination of Binance’s compliance with the Markets in Crypto-Assets Regulation (MiCA), particularly concerning the exchange’s reliance on a specific exemption to continue serving some European Union customers.
SEC Proposes Easing Custody Requirements for Investment Advisers
The U.S. Securities and Exchange Commission (SEC) has put forth a proposed rule change designed to address a critical barrier that has impeded investment advisers from fully integrating digital asset offerings into their client services. This proposal, unveiled on Thursday, aims to provide greater flexibility in how investment advisers and funds manage the custody of crypto assets, potentially unlocking new avenues for investors seeking exposure to this rapidly evolving asset class.
The core of the SEC’s proposal centers on allowing registered investment advisers to hold client crypto assets directly under specific conditions, particularly when a qualified, third-party custodian is unavailable. This provision is crucial, as the absence of readily accessible and approved custodians for certain digital assets has been a significant operational challenge, forcing some advisers to decline certain token allocations or to defer client investments until custody solutions materialize. The proposal also extends to permitting state-chartered trust companies to serve as eligible crypto custodians, broadening the pool of entities capable of fulfilling this role.
SEC Chair Paul Atkins, in a statement accompanying the proposal, acknowledged the significant growth of the crypto asset market, noting its transformation from a niche interest into a multi-trillion-dollar asset class. He recognized that the existing regulatory framework has not always kept pace with this expansion. "The crypto asset market has grown from a niche curiosity into a multi-trillion-dollar asset class to which investors actively seek exposure," Atkins stated. "Unfortunately, our rules and regulations have not kept pace." This admission underscores the SEC’s recognition of the need to adapt existing regulations to accommodate the realities of the digital asset market.
The Digital Chamber of Commerce, a prominent industry advocacy group, has previously voiced concerns regarding the scarcity of qualified crypto custodians. In a May 2025 submission to the SEC, the organization detailed instances where investment advisers had been compelled to turn away clients or request that portfolio companies retain digital assets until adequate custody solutions became available. The proposed SEC rule directly addresses this practical impediment, aiming to remove a significant friction point for advisers and, by extension, for investors who wish to diversify their portfolios with digital assets.
The timeline for this proposal involves a public comment period, during which stakeholders will have the opportunity to submit feedback. Following this, the SEC will review the comments and decide whether to adopt the proposed rule, potentially with modifications. The eventual implementation of these changes could significantly influence the accessibility and operational efficiency of cryptocurrency investment advisory services in the United States.
New York and Wyoming Forge Alliance for Coordinated Crypto Oversight
In a move that signals a growing recognition of the interconnected nature of the digital asset economy, the financial regulators of New York and Wyoming have established a formal agreement to coordinate their oversight of cryptocurrency firms operating across both states. This pact, signed between the New York State Department of Financial Services (NYDFS) and the Wyoming Division of Banking, represents a significant step towards harmonizing regulatory approaches and fostering greater efficiency in the supervision of crypto businesses.
The agreement mandates that the two state agencies will collaborate on various aspects of regulatory oversight, including licensing reviews, examinations, and enforcement actions. This collaborative framework will enable the regulators to share crucial supervisory information and historical examination data, providing a more comprehensive understanding of the operational and compliance postures of companies operating in both jurisdictions. Furthermore, the agencies plan to coordinate their examination schedules, potentially leading to joint reviews of firms that maintain a presence and operate under licenses in both New York and Wyoming.
A key benefit of this inter-state pact is the potential for a streamlined approval process for crypto companies seeking to operate in both states. Firms that have already secured a license or charter in one of the participating states and have maintained a clean compliance record for at least three years without facing enforcement actions may qualify for an expedited review in the other state. The regulators are targeting a decision within six months for such expedited applications, a timeline that could significantly reduce the time-to-market for innovative digital asset businesses.
The partnership also facilitates the sharing of investigative information and the coordination of potential enforcement actions, enhancing the ability of both states to address illicit activities or compliance breaches effectively. This coordinated approach is particularly noteworthy given the historically distinct regulatory philosophies adopted by New York and Wyoming concerning digital assets. New York, since 2015, has operated its stringent BitLicense regime, known for its comprehensive requirements and thorough vetting process. In contrast, Wyoming has actively pursued a strategy of embracing digital assets through specialized legislation and the creation of unique banking charters designed to accommodate the specific needs of blockchain and cryptocurrency businesses.
This alliance between two states with such differing regulatory traditions underscores a broader trend towards greater cooperation among U.S. state regulators in navigating the complexities of the digital asset space. The aim is to create a more consistent and predictable regulatory environment, which can foster innovation while also safeguarding investors and the financial system. The success of this New York-Wyoming initiative could serve as a model for other states looking to enhance their regulatory frameworks for digital assets.
European Regulators Scrutinize Binance’s MiCA Exemption Use
In Europe, the spotlight is intensifying on Binance, one of the world’s largest cryptocurrency exchanges, as regulators reportedly examine the company’s reliance on a specific legal exemption within the Markets in Crypto-Assets Regulation (MiCA) to continue serving some customers in the European Union. The European Securities and Markets Authority (ESMA) and national regulators in key member states, including France, Germany, and Greece, are reportedly scrutinizing Binance’s interpretation and application of the "reverse solicitation" exemption.
The Financial Times reported on Thursday that these European regulatory bodies are investigating whether Binance’s current operational model aligns with the spirit and letter of MiCA, the EU’s comprehensive framework for digital asset markets that came into full effect in June 2024. Binance had previously withdrawn its application for a MiCA license in Greece in June, stating its intention to seek authorization in another EU member state. Despite this, the exchange has continued to offer services to some EU customers, reportedly relying on the reverse solicitation clause.
The reverse solicitation exemption allows crypto asset service providers (CASPs) based outside the EU to serve customers who initiate contact and request services entirely on their own initiative. However, ESMA’s guidelines on this matter emphasize that this exemption should not be used as a loophole to circumvent the stringent requirements of MiCA. Regulators are keen to ensure that exchanges are not leveraging this provision to avoid the licensing and compliance obligations mandated by the new regulation, which aims to provide a harmonized and robust regulatory framework across the EU.
Binance has maintained its commitment to operating within the EU regulatory framework. A spokesperson for Binance told Cointelegraph on September 18 that the company "continues pursuing MiCA authorization and remains committed to operating in Europe on a long-term compliant basis." This statement suggests that while the exchange may be facing regulatory headwinds regarding its current operational strategy, it intends to achieve full compliance with MiCA.
The scrutiny of Binance’s use of reverse solicitation highlights a critical challenge for regulators in the decentralized world of crypto. Ensuring that companies operating globally adhere to local regulations, especially when using exemptions designed for specific scenarios, requires diligent oversight and a clear understanding of how these exemptions are being applied in practice. The outcome of these investigations could have significant implications for Binance’s operational capacity within the EU and could set precedents for how other non-EU CASPs navigate MiCA.
The broader context for these developments is the ongoing global effort to establish comprehensive regulatory frameworks for digital assets. As the crypto market matures and its integration with traditional finance deepens, regulators worldwide are grappling with the dual imperative of fostering innovation and mitigating risks. The actions by the SEC, the New York and Wyoming regulators, and their European counterparts underscore a collective move towards greater clarity, coordination, and enforcement in the digital asset space, aiming to balance the potential benefits of this technology with the need for investor protection and financial stability.
