SEC Proposes Rules for Self-Custody of Crypto Assets

The US Securities and Exchange Commission (SEC) has proposed new rules to facilitate the growth of the crypto sector. As part of these efforts, investment advisors and funds will be allowed to serve as custodians for crypto assets. The proposals aim to expand the options for custodying crypto assets beyond approved custodians, including by permitting firms to 'self-custody' those assets.

The SEC is seeking to modernize custody rules and provide a clearer regulatory framework for the custody of crypto assets. According to SEC commissioner Hester Peirce, the proposal would expand authorized custody options beyond current 'qualified custodians,' who may not be available or may not have the technological expertise to safeguard certain crypto assets.

The proposals will go out for a 60-day public comment period once they are published in the Federal Register. SEC chairman Paul Atkins noted that the proposal would provide a clear regulatory framework for the custody of crypto assets, giving investment advisors and funds a compliant pathway where none existed before.