Comments to the SEC on Custody of Digital Asset Securities

Today, Lincoln Network, in conjunction with four other co-authors, submitted formal comments to the Securities and Exchange Commission (SEC) in response to the questions posed within the Policy Statement on the Custody of Digital Asset Securities by Special Purpose Broker-Dealers. In our formal comment, we address industry best practices related to custody of digital assets, risk disclosure, and securing private keys, while providing proposals for each of these areas.

The Co-Authors fully support the Securities and Exchange Commission (the “SEC”) in its proactive, forward-thinking approach towards the potential regulation of digital assets. We agree with the SEC’s recognition for modern, effective policies that permit the trade of new digital financial instruments while simultaneously benefiting from the security and uniformity provided by prudent regulations. The Co-Authors also greatly appreciate the SEC’s decision to solicit public comment to gain better understanding of the “wild west” of digital assets.

The Co-Authors hope the SEC considers the following responses to the questions posed within the Policy Statement on the Custody of Digital Asset Securities by Special Purpose Broker-Dealers (the “Statement”): (1) the industry best practices for generating and securing private keys; (2) the industry best practices the affect custody of digital assets; (3) the processes, software, and hardware systems that secure private keys; (4) the accepted model practices and language with respect to risk disclosure.

A copy of the formal comment is available here. The following individuals co-authored the formal comment:

  • Nicholas Bruno, Co-Chair of the Blockchain Subcommittee of the Information Technology and Cyber Law Committee of New York City Bar Association and Editor-in-Chief of the Journal of International Business and Law
  • Tyler Yagman, Co-Chair of the Blockchain Subcommittee of the Information Technology and Cyber Law Committee of New York City Bar Association
  • Philip Dursey, Senior Advisor for Cyber at Lincoln Network and Founder of Keyed
  •  David T. Ackerman, Esq, Regulatory Subject Matter Expert for NICE and NICE Actimize

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Dan Lips
VP for National Security and Oversight
Garret Johnson Lincoln Executive Director
Garrett Johnson
Executive Director
Zach Graves
Head of Policy
Sean Roberts
Senior Advisor
J. Scott McKaig
CFO and General Counsel
Arthur Rizer
Senior Advisor
Grace Meyer
Chief Operating Officer
Marshall Kosloff
Director of Outreach and Media
Luke Hogg
Policy Manager