BANGKOK (The Nation/Asia News Network): The Securities and Exchange Commission (SEC) has issued new regulations requiring digital asset custodians to establish a digital wallet management system, including key, to ensure security of customers’ assets.
The SEC defines a “key” as a cryptographic key or any other data that must be kept confidential and used for approval of transfers or transactions related to digital wallets.
The new regulations cover the following three requirements:
1. Policy and guidelines for overseeing risk management and management of digital wallets and keys as well as communication to clarify such policy, action plans and procedures, work supervision and internal control to ensure compliance with the policy.
2. Policy and procedures for designing, developing and managing digital wallets as well as creating, maintaining and accessing keys or other related information appropriately, securely and safely.
3. Contingency plan in case of events that may affect the management system of digital wallets and keys. This includes laying out and testing action procedures, designating responsible persons and reporting the event. An audit of system security as well as digital forensic investigation are also required in case the event affects security of systems and clients’ assets.
The new regulations took effect on Monday (Jan 16). Operators are required to comply with the regulations within six months.
