SEC Proposes New Crypto Custody Rules for Registered Advisers

The SEC has proposed new crypto custody rules that would give registered investment advisers and regulated funds more ways to safeguard digital assets, including using state trust companies or self-custody under specific conditions.

The proposal would create a tailored custody framework for crypto assets while updating decades-old rules governing how investment advisers and regulated funds safeguard client assets. It aims to address custody challenges created by digital assets and remove regulatory barriers that can make it difficult for advisers to offer crypto-related investment strategies.

The SEC is seeking public comment for 60 days after publication in the Federal Register, so the final requirements could change. The proposal would expand the institutions that can custody qualifying crypto assets and establish conditions under which advisers and regulated funds could use their own custody arrangements.