SEC Proposes Crypto Custody Rules for Advisers and Funds

The U.S. Securities and Exchange Commission (SEC) has proposed new rules to create a tailored framework for registered investment advisers and regulated funds to custody certain crypto assets.

The proposal, released on October 1, would permit advisers to hold eligible client crypto assets themselves in limited circumstances when no permitted custodian is available.

According to SEC Chair Paul Atkins, the framework provides a 'compliant pathway for crypto custody,' targeting gaps created by existing rules developed primarily for traditional financial assets.

The proposal also creates a route for state-chartered trust companies to serve as custodians for client and regulated fund crypto assets.