SEC Proposes Clear Crypto Custody Rules to End 'Grey of Uncertainty'

The U.S. Securities and Exchange Commission (SEC) is taking steps to provide a clear regulatory framework for the custody of cryptocurrencies, according to SEC Chair Paul Atkins. The new proposal aims to create a pathway for investment advisers and funds to safely hold and manage cryptocurrencies, replacing the 'grey of uncertainty' created by outdated rules. This move comes as the cryptocurrency market has grown to a multi-trillion-dollar asset class, but regulations have not kept pace.

The proposed rules would allow cryptocurrencies to be held in self-custody under certain circumstances and permit state trust companies to act as custodians for client and regulated fund cryptocurrency assets. SEC Commissioner Hester Peirce has previously stated that self-custody is a 'very fundamental American right,' and people should be free to hold assets themselves or use intermediaries. The new regulations aim to remove barriers that can limit advisers' ability to offer cryptocurrency-related investment advice.

Atkins has emphasized that the SEC will 'act decisively' to provide regulatory clarity to cryptocurrencies, regardless of the outcome of the CLARITY Act. The SEC has already proposed a new regulation to enable cryptocurrency projects to raise money without immediate registration requirements.