WASHINGTON (Reuters) -The U.S. Securities and Exchange Commission on Monday dropped its emphasis on the oversight of companies offering crypto asset-related services as part of its priorities for examining Wall Street firms for the current fiscal year, according to an annual statement published by the agency.

The SEC's Division of Examinations, which scrutinizes the legal compliance of investment advisers, broker-dealers, clearing agencies, stock exchanges and others, said it would focus on fiduciary duty, standards of conduct, and asset custody as well as new requirements for customer data privacy, among other subjects.

However, the statement contained no standalone section explicitly focusing on crypto activity and the volatility of digital assets, as it has in prior years. The U.S. government's current fiscal year ends on September 30, 2026.

WHY IT'S IMPORTANT 

Under President Donald Trump, who has embraced the crypto sector politically and personally, the SEC has laid out a sweeping agenda to promote the development of the digital asset sector, marking an about-face from the prior administration, which viewed the industry as rife with fraud and noncompliance. The industry is likely to interpret Monday's shift in emphasis as another encouraging sign.

In response to a request for comment, an SEC spokesperson referred to a passage in Monday's announcement according to which this year's priorities were "not ... an exhaustive list of all areas" SEC examiners will focus on.

KEY QUOTE

"Examinations are an important component to accomplishing the agency's mission, but they should not be a 'gotcha' exercise," SEC Chairman Paul Atkins said in the announcement. "Today's release of examination priorities should enable firms to prepare to have a constructive dialogue with SEC examiners and provide transparency into the priorities of the agency's most public-facing division."