SEC Issues Crypto Custody Warning for Retail Investors
The SEC’s Office of Investor Education and Assistance issued a bulletin warning retail investors about crypto asset custody risks.
Summary
- The SEC warned that losing a private key means permanent loss of crypto assets.
- Investors must choose between self-custody wallets or third-party crypto custodians.
- The SEC cautioned that custodian hacks, failures, or misuse can lock users out.
The guidance covers how investors can store and access digital assets through crypto wallets, which hold private keys rather than the assets themselves.
The bulletin distinguishes between hot wallets connected to the internet and cold wallets stored on physical devices.
The SEC…
