Crypto Custody Rule Proposal Aims to Modernize Digital Asset Storage
The Securities and Exchange Commission (SEC) has released a fact sheet on crypto custody for registered investment advisers, accompanied by a proposed rule that could change who is allowed to hold client digital assets.
The proposal aims to modernize custody arrangements for crypto assets and securities, targeting two groups: registered investment advisers (RIAs) that hold client crypto funds and regulated investment companies that manage crypto securities.
The existing rules come from the Advisers Act and the Investment Company Act, which were written before anyone held a private key. The new proposal seeks to update those frameworks for digital assets.
The most significant change concerns who qualifies as a custodian. Under the proposal, qualified state-chartered trust companies could serve as permissible custodians, provided they meet defined conditions.