US OCC proposes valuing spot crypto ETPs held by clearing members’ affiliated custodians at zero

Foresight News reported that, according to the SEC official website, the Options Clearing Corporation (OCC) has proposed to implement "Specific Wrong-Way Risk" (SWWR) controls for spot cryptocurrency ETP positions where the clearing member or its affiliates act as custodians. In such cases, the relevant fund shares and option valuations will be counted as zero to reduce credit exposure arising from crypto asset custody risks. In addition, the OCC plans to stop accepting letters of credit and GSE debt securities as eligible collateral.