According to recent reports, the United States Securities and Exchange Commission (SEC) intends to propose new regulatory changes this week that could have an effect on the type of services that cryptocurrency companies can provide to their clients.

According to a report published on Feb. 14 by Bloomberg, citing “individuals familiar with the matter,” the securities regulator is working on a draft proposal that would make it more difficult for cryptocurrency firms to act as “qualified custodians” on behalf of investors. digital assets of its customers.

This, in turn, could have an effect on the many hedge funds, private equity firms, and pension funds that collaborate with cryptocurrency startups.

The people cited said that on February 15 a five-person panel from the SEC would decide whether or not the plan would advance to the next level.

For the remaining members of the SEC to cast an official vote on the proposal, they must achieve a majority of three votes out of five. If the idea is accepted, it will be revised based on the input provided where necessary.

People familiar with the situation have said it is unclear what specific changes the US financial watchdog is seeking. This is despite the fact that the SEC has been deliberating what it should take to be a certified cryptocurrency custodian since March 2019.

According to Bloomberg, if the deal is confirmed, some cryptocurrency firms may be required to move their clients’ digital asset holdings to another location.

According to the study, these financial institutions may be exposed to “surprise audits” about their custodial relationships or other ramifications. This information was included in the report.

After a story published on Jan. 26 by Reuters said the SEC may soon investigate Wall Street financial advisers over how they granted custody of cryptocurrency to their clients, news of the proposed vote to be held on Wednesday surprises.

The Securities and Exchange Commission (SEC) has been quite busy in recent days dealing with Paxos Trust, the issuer of Binance USD (BUSD) stablecoin. The SEC is of the opinion that the Paxos Trust issued the cryptocurrency in the form of an unregistered security.

Paxos said they were prepared to “vigorously litigate” the matter if it came to it.