SEC Revives Proposal for Crypto Custody Rules Amid Industry Uncertainty

The U.S. Securities and Exchange Commission (SEC) has revived efforts to create rules for the custodial safekeeping of cryptocurrencies by investment advisers, a move that was previously stalled under the previous administration.

The SEC is drafting new regulations that will modernize existing rules on the custody of client assets and fund assets, with a focus on addressing the complexities surrounding crypto assets. The regulator has submitted its proposal to the White House Office of Management and Budget for review, which may lead to a formal regulatory proposal.

The initiative aims to provide clarity on how custody requirements apply to the crypto industry, as well as simplify certain requirements in light of evolving market practices and technologies. Investment advisers and firms have expressed concerns about complying with existing rules when holding crypto assets, and the new regulation is intended to address these issues.