SEC Proposes Framework for Crypto Asset Custody

The Securities and Exchange Commission (SEC) has proposed new rules for the custody of crypto assets held by registered investment advisers and regulated funds.

The proposal, which will remain open for public comment for 60 days, aims to create a dedicated framework for the custody of crypto assets, addressing the uncertainty surrounding how to lawfully custody this asset class.

SEC Chairman Paul Atkins stated that the current framework has left investment advisers and funds uncertain about how to hold crypto assets, which are increasingly requested by clients.

Under the proposal, advisers could use self-custody when specific conditions are satisfied, and state-chartered trust companies could qualify to hold crypto assets.

The changes could allow regulated funds to offer a broader range of crypto-related strategies while remaining subject to federal custody requirements.