SEC Proposes New Rules for Holding Crypto Assets by Investment Advisors

The U.S. Securities and Exchange Commission (SEC) has proposed a new set of rules to govern the holding of cryptocurrency assets by investment advisors and regulated funds.

The proposal, announced by SEC Chairman Paul Atkins, aims to clarify record-keeping, public disclosure, and oversight requirements for investment advisors and funds when holding clients' crypto assets.

Atkins noted that the current custody regulations are largely designed with traditional financial assets in mind and are insufficient to meet the needs of the rapidly growing cryptocurrency market.

The new proposal would permit the holding of crypto assets in their own custody under certain conditions and would allow state-authorized trust companies to be used as custodians.

The SEC's proposal will be open to public consultation for 60 days, after which the Commission will decide on the final version of the regulation.