SEC Proposes New Crypto Asset Custody Rules

The U.S. Securities and Exchange Commission (SEC) has proposed new rules to govern the custody of crypto assets by registered investment advisers and affiliated funds.

The proposal aims to create a clear regulatory framework for working with digital assets under the Investment Advisers Act of 1940 and the Investment Company Act of 1940, removing barriers that limit investment advisers' ability to provide crypto-related services.

Under the proposed rules, investment advisers and funds would be able to self-custody crypto assets if certain conditions are met. State-registered trust companies would also be allowed to act as custodians for digital assets.

The SEC plans to update existing requirements on auditing financial statements, recordkeeping, and disclosures related to crypto custody.