SEC Proposes New Custody Rules for Digital Assets Amid Crypto Growth
The Securities and Exchange Commission (SEC) has acknowledged that its regulations have not kept pace with the rapid growth of Bitcoin, which launched in 2008. SEC Chairman Paul Atkins admitted that the agency's rules have failed to adapt to the multi-trillion-dollar crypto asset market.
To address this issue, the SEC has proposed new custody rules for digital assets. The proposal aims to modernize how advisers and funds hold crypto assets by providing a clearer framework based on today's market rather than outdated guidance from decades ago.
The key provisions of the proposal include allowing registered investment advisers and regulated funds to hold crypto under a new framework, enabling clients to self-custody their assets under specific conditions, and expanding the role of state-chartered trust companies as custodians.