SEC Seeks to Ease Crypto Custody Rules for Investment Advisers

The U.S. Securities and Exchange Commission has proposed new rules to ease regulatory barriers for investment advisers and funds holding cryptocurrencies on behalf of clients.

The proposed framework, announced by SEC Chairman Paul Atkins, aims to modernize decades-old custody requirements and allow registered investment advisers, investment companies, and business development companies to hold crypto assets in a compliant manner.

Crypto assets could be held in self-custody under certain circumstances, while state trust companies can serve as custodians for clients' and regulated funds' crypto assets. This change is expected to give regulated funds greater scope to offer investors crypto-related investment strategies.

The proposal comes after the Clarity Act, a sweeping crypto market structure bill, stalled in the Senate in September. The SEC's effort to rewrite the U.S. regulatory framework for digital assets continues, with this proposal open for public comment for 60 days.