SEC Proposes Crypto Custody Framework for RIAs and Regulated Funds
The US Securities and Exchange Commission (SEC) has proposed new rules to provide a framework for the custody of crypto assets by registered investment advisers and regulated funds. The proposal aims to update existing regulations that were crafted for a bygone era, according to SEC Chairman Paul Atkins.
The framework would allow regulated funds, including registered investment companies and business development companies, to offer clients a wider range of crypto-asset-related investment strategies. This would expand investor choice and eliminate barriers that restrain the adviser's ability to provide crypto-related investment advice.
The proposal would also permit the use of state trust companies as custodians for clients and regulated fund crypto assets, as well as allow crypto assets to be held in self-custody under certain circumstances. The SEC is seeking to amend the Investment Advisers Act of 1940 and the Investment Company Act of 1940 to update requirements related to financial statement audits and broker-dealer custodial services.
The proposal comes at a time when the crypto industry has grown into a multi-trillion-dollar asset class since Bitcoin was launched in 2008. Bitcoin (BTC) rose 1.5% in the past 24 hours to $84.8K, while Ethereum (ETH) rose 0.7% to $2.70K.