SEC Proposes New Crypto Custody Rules to Boost Institutional Options

The US Securities and Exchange Commission (SEC) has proposed new rules for crypto custody, aiming to remove regulatory hurdles and provide transparent ways for registered investment advisers (RIAs) and regulated funds to offer crypto advisory and custodial services.

The proposal, which replaces the withdrawn 2023 Safeguarding Rule, would allow limited permitted self-custody for RIAs, authorize state-chartered trust companies and regulated broker-dealers as custodians, and impose cybersecurity and asset segregation requirements.

The new rules are designed to address the 'grey of uncertainty' resulting from outdated regulations that have been outpaced by the evolving crypto ecosystem, according to SEC Chairman Paul Atkins.