SEC Proposes Expanded Crypto Custody Options for Institutional Investors

The US Securities and Exchange Commission (SEC) has proposed a new framework for investment advisers and regulated funds to hold crypto assets through expanded custody options.

The proposal would allow investment advisers and regulated funds to use state trust companies as crypto custodians and also permit advisers to custody crypto assets themselves in limited circumstances.

SEC Chair Paul Atkins described the proposal as a compliant pathway for institutions seeking exposure to cryptocurrencies, which have grown from a niche curiosity into a multi-trillion-dollar asset class since the advent of Bitcoin in 2008.

The proposal aims to update federal custody rules that were largely developed before digital assets existed and address a long-standing challenge for institutional crypto adoption: the limited availability of qualified custodial infrastructure for certain digital assets.