SEC Proposes Rules to Clear Up Crypto Custody Confusion
The Securities and Exchange Commission (SEC) has proposed new rules to clarify how registered investment advisers and regulated funds can custody cryptocurrency. The plan aims to ease regulatory ambiguity and provide a clear compliance path for professional money managers.
Under current regulations, advisers are required to keep client assets with 'qualified custodians' that meet strict safekeeping standards. However, it has been unclear which crypto arrangements satisfy this bar, leaving many firms hesitant to offer digital-asset strategies.
The proposed framework would permit self-custody of crypto assets under certain conditions and allow state trust companies to serve as custodians for client and fund crypto. It also updates rules around financial-statement audits for advisers and broker-dealer custodial services for funds.
The SEC's goal is to widen investor access to crypto strategies by removing barriers that have kept advisers on the sidelines. The agency's Chairman, Paul Atkins, said in a statement that the proposal would replace 'the grey of uncertainty created by custody rules crafted for a bygone era.'