The U.S. Securities and Exchange Commission's (SEC) proposed rule requiring investment firms to safeguard all client assets, including cryptocurrency, with approved custodians has faced criticism from various industries. JPMorgan and the Small Business Administration have objected to the expanded requirement, arguing that it could threaten smaller investment advisers.

The proposed rule excludes crypto platforms from being qualified custodians, which has raised concerns about unregulated activities and limited options for customers. The SEC is currently reviewing outside comments before finalizing the rule. However, some experts warn that cutting off crypto custody services could lead to offshore and unregulated activities.