The U.S. Securities and Exchange Commission has issued new guidance aimed at helping retail investors understand how custody choices can determine the safety of their crypto holdings.
The Investor Bulletin was released on December 12 by the SEC’s Office of Investor Education and Assistance as part of broader efforts to raise awareness of crypto-related risks.
The regulator stressed that how digital assets are stored can influence whether they survive hacks, bankruptcies, or the shutdown of service providers.
A central focus of the bulletin is the selection of third-party custodians, including crypto exchanges and specialised digital asset custody firms.
The SEC advised investors to thoroughly research custodians before depositing funds, including reviewing company backgrounds and regulatory standing.
Retail investors were encouraged to examine whether custodians have faced enforcement actions or accumulated customer complaints.
The guidance noted that custodians differ significantly in the range of crypto assets they support, making verification essential before transferring holdings.