SEC Proposes Framework for Institutional Cryptocurrency Custody
The Securities and Exchange Commission has proposed a new framework for how registered investment advisers and regulated funds can custody cryptocurrency, aiming to clear up regulatory ambiguity that has long kept firms hesitant to offer digital-asset strategies.
The proposal would permit self-custody under certain conditions, allow state trust companies to serve as custodians, and update audit and broker-dealer custodial rules. It's the latest move in the SEC's post-Clarity Act build-out, following the innovation exemption and Regulation Crypto Assets.
According to SEC Chairman Paul Atkins, 'the crypto asset market has grown from a niche curiosity into a multi-trillion-dollar asset class' since Bitcoin emerged in 2008. He added that the agency's rules 'have not kept pace,' creating uncertainty around custody arrangements.