SEC Proposes Crypto Custody Relief for Investment Advisers
The US Securities and Exchange Commission (SEC) has proposed changes to make it easier for investment advisers and certain funds to hold clients' crypto assets when a qualified custodian is not available. The proposal aims to remove a practical bottleneck that has limited how broadly advisers can offer digital asset exposure.
According to SEC Chair Paul Atkins, the crypto market has grown into a multi-trillion-dollar asset class, but existing rules have not kept pace with how investors seek access to it. The proposed changes target specific custody requirements under federal investment-adviser and investment-company frameworks.
The proposal would allow advisers to hold certain client crypto assets themselves if no permitted custodian is available for each asset. This self-custody would come with conditions, including quarterly reassessment, private-key controls, cybersecurity requirements, and transfer approvals by at least two authorized individuals.