Oct. 20, 2023
regulatory confusion surrounding digital asset custody across international boundaries could enable unfair treatment of global market participants. Some potential issues: Jurisdictional conflicts - Unclear when different national or state regulations take precedence over custody activities spanning borders. Double standards - Contradictory regulations could subject companies to opposing or duplicated sets of rules. Data restrictions - Confusion around cross-border data transfer restrictions may limit custody operational efficiency. Arbitrage incentives - Regulatory gaps between jurisdictions may incentivize risky arbitrage schemes. Haven shopping - Companies may jurisdiction shop for regulatory havens with lower cybersecurity standards. Technical barriers - Prescriptive tech requirements that fragment custody infrastructure across borders. Investor uncertainty - Market participants may face difficulty discerning level of custody protections when assets span jurisdictions. Compliance costs - Attempting to simultaneously comply with disjointed international rules could increase costs. You're right - regulatory clarity, coordination, and consistency in treatment across jurisdictions is crucial for digital asset custody. The SEC should collaborate with other national regulators to provide coherent guidance and oversight for global custody platforms. This will help mitigate risks while enabling efficient worldwide market infrastructure.