The U.S. Securities and Exchange Commission (SEC) Division of Trading and Markets published on December 17, 2025, a comprehensive set of Frequently Asked Questions (FAQ) addressing crypto asset activities and distributed ledger technology (DLT). The document provides staff-level guidance on how existing federal securities laws apply to crypto asset securities and, in limited circumstances, to regulated entities handling non-security crypto assets. The SEC emphasized that the responses reflect only the views of the Division staff and are not official SEC rules or statements, carrying no legal force.
Custody and Capital Rules: Bitcoin and Ether Get Favorable Treatment
The FAQ first addresses broker-dealer involvement in crypto exchange-traded products (ETPs). Staff clarified that broker-dealers holding proprietary positions in the underlying assets of an ETP must include those assets in their net capital calculations. However, the staff stated they will not object to a broker-dealer treating proprietary positions in bitcoin or ether as readily marketable for purposes of determining whether the 20% haircut under Appendix B of Rule 15c3-1 applies. This effectively gives bitcoin and ether a more flexible capital treatment compared to other commodities.
On custody, the FAQ notes that Rule 15c3-3 applies exclusively to securities, leaving non-security crypto assets outside the core customer protection provisions, including coverage under the Securities Investor Protection Act (SIPA). The staff reiterated that participation in the special purpose broker-dealer custody framework remains optional. Additionally, crypto asset securities may be held without certificated form as long as control requirements are met.
Trading and Recordkeeping: DLT Recognized as Official Record
In operational areas, the FAQ emphasizes recordkeeping expectations for firms engaged in non-security crypto activities. The staff believes that a broker-dealer conducting a non-security crypto asset business could make and keep the same records for those activities as it does for its securities activities, promoting a unified approach.
For service providers, the FAQ analyzes when they must register as transfer agents for crypto asset securities and confirms that DLT may serve as an official master securityholder file if all safeguarding, reporting, and retention requirements are satisfied. The document also explains how national securities exchanges and alternative trading systems (ATS) may facilitate pair trading involving security and non-security crypto assets, provided they meet Regulation ATS and Regulation NMS obligations. It outlines Form ATS and Form ATS-N disclosure expectations, clarifies when ATS operators do not need to register as clearing agencies, extends prior Regulation M no-action relief principles to crypto ETPs, and reaffirms that anti-fraud and anti-manipulation provisions of federal securities laws continue to apply.
Key Takeaways
The release of this FAQ marks a significant step forward in SEC's crypto regulatory clarity, providing market participants with much-needed guidance. Key points include:
- Custody applicability: Only security crypto assets fall under Rule 15c3-3; non-security crypto assets are excluded from core protections.
- Net capital flexibility: Bitcoin and ether can be treated as readily marketable commodities for net capital purposes.
- Voluntary special purpose framework: Participation in the special purpose broker-dealer custody framework is not mandatory.
- DLT as official record: Distributed ledger technology can be used as the master securityholder file if regulatory requirements are met.
- Trading platform rules: ATS and national exchanges can pair trade security and non-security crypto assets provided they comply with existing regulations.