SEC Advances Digital Asset Custody Rule Revision with White House Submission
The U.S. Securities and Exchange Commission (SEC) has submitted a proposed rule revision on digital asset custody to the White House Office of Management and Budget (OMB), marking a significant step toward modernizing how investment advisers and investment companies hold client crypto assets.
The draft rule aims to clarify custody standards for digital assets held by investment advisers and investment companies, providing institutions with clearer guidance on safely holding crypto without running afoul of existing SEC regulations. This proposal is part of the regulatory modernization push led by SEC Chairman Paul Atkins, who has prioritized aligning agency rules with the realities of digital asset markets.
The revision would replace legacy custody provisions that many industry participants have criticized as ambiguous or ill-suited for crypto's unique characteristics, such as private key management and blockchain-based transfers. If approved, the new framework could reduce legal uncertainty and operational costs for investment advisers and funds.