SEC Eases Rules for Investment Advisers to Hold Cryptocurrency
The US Securities and Exchange Commission (SEC) has proposed easing rules for investment advisers to hold clients' cryptocurrency, aiming to address a regulatory hurdle that has held back some businesses from offering digital asset investments.
The proposal would allow investment advisers to hold clients' crypto assets themselves when no eligible custodian is available, with conditions. This includes establishing that no permitted custodian is available for each asset and reassessing that determination quarterly.
Self-custody would also require safeguards around private keys, cybersecurity, and separation of each client's holdings. At least two authorized individuals would have to approve any transfer of a self-custodied crypto asset.
The proposal targets the practical barrier of investment advisers struggling to find qualified custodians for particular tokens, limiting the investments they can offer clients.