SEC Proposes Modernized Crypto Custody Rules for Institutions
The U.S. Securities and Exchange Commission (SEC) has proposed new rules to modernize the custody framework for crypto assets held by registered investment advisers and regulated funds.
The proposed rules aim to address the top challenge for institutions entering the crypto space: managing digital assets securely while adhering to federal securities regulations.
The existing custody rules, which apply primarily to traditional assets, have failed to consider the needs of blockchain-based assets, according to the SEC.
The proposal would allow investment advisers and regulated funds to offer investment strategies regarding cryptocurrencies more easily while adhering to investor protections.
Self-custody of cryptos could become available under certain conditions, including the use of qualified custodians, state trust companies, and limited self-custody options.
SEC Chair Paul Atkins said that crypto has grown from a niche technology into a multi-trillion-dollar asset class, while regulatory frameworks have struggled to keep pace.