US Banks Lobby SEC for Bitcoin ETF Custody


The US Securities and Exchange Commission (SEC) has yet to approve a spot Bitcoin (BTC) exchange-traded fund (ETF).

Industry Letter:

On Valentine’s Day, four major banking industry groups sent a joint letter to SEC Chairman Gary Gensler, advocating for the approval of spot BTC ETFs and requesting a modification to a 2022 law (SAB No. 121) that regulates crypto custodianship.

Concerns with SAB No. 121:

The banking groups argue that SAB No. 121 requires entities safeguarding digital assets to list them on their balance sheet at a fair value, which:

  • Prevents banks from participating in digital asset custody at scale.
  • Discourages banks from exploring responsible use cases for blockchain technology.

Proposed Solution:

The groups propose narrowing the definition of “crypto asset” and exempting banking organizations from on-sheet listing requirements while maintaining disclosure obligations. This, they argue, would:

  • Address banks’ concerns without undermining the SEC’s goal of investor disclosure.
  • Allow banks to provide custodial solutions for digital assets.