Lawmakers have written to the US Securities and Exchange Commission (SEC) urging it not to limit state-regulated custodians in its proposed rule tightening cryptocurrency custody requirements. The SEC's proposed rule would require registered investment advisers to keep crypto with a qualified custodian, which could be a bank or broker-dealer. However, the SEC is considering narrowing the rule to only certain banks subject to federal regulation. The proposal has garnered pushback, with some arguing that excluding state-regulated institutions from becoming qualified custodians would lead to greater market concentration and adversely affect competition.