SEC Proposes Revised Crypto Custody Rules for Investment Advisers

The US Securities and Exchange Commission (SEC) has proposed a new rule revising its cryptocurrency custody regulations for investment advisers and investment companies. The proposal aims to clarify how these institutions can hold clients' cryptocurrencies without breaching SEC rules.

The existing framework, which has become outdated due to changes in market practices, will be replaced with clearer standards. This move follows industry inquiries from investment advisers and investment companies seeking guidance on how to manage client cryptocurrencies while complying with SEC regulations.

The proposal is part of a broader effort led by SEC Chairman Paul Atkins to modernize the regulatory framework. It seeks to codify custody standards, directly affecting registered investment companies that handle cryptocurrencies.