In a letter, addressed to SEC Secretary Vanessa Countryman, Sonnenshein addressed the Custody Rule, as well as the unique benefits and risks of digital assets when amending the rule.

The custodial landscape for digital assets has evolved since Grayscale launched its Bitcoin Trust in 2013, Sonnenshein says.

Also Read: Sam Bankman-Fried Makes A Bold Move To Crush Accusations

The market, he claims, now consists of many secure, institutionalized, regulated, and insured custodian providers, which have never reported a loss of client assets.

Sonnenshein also urged the SEC to take these developments into account when considering amendments to the Custody Rule and cautioned against imposing significant new costs, risks, and burdens without added benefits.

Sonnenshein also highlighted the similarities between the custody of digital assets in cold storage and the custody of physical assets like gold, arguing that similar obligations and exemptions that apply to physical assets should apply to digital assets in cold storage as well.

Other talking points in the letter included:

Grayscale sponsors crypto funds, such as the Grayscale Bitcoin Trust (OTC:GBTC) and Grayscale Ethereum Trust (OTC:ETHE). Rather than have custody of client assets itself, it engages expert third-party custodians to provide this service.

Grayscale currently relies on Coinbase Custody Trust, a subsidiary of Coinbase Global, Inc. (NASDAQ:COIN), for the custody of all its products.

Coinbase Custody is licensed for custody of client digital assets as a New York-chartered limited-purpose trust company. It is regulated by the New York State Department of Financial Services.

Next: Goldman Sachs, Microsoft, Deloitte And Others Join Forces On Blockchain Superhighway