SEC Proposes Crypto Custody Rules for Advisers and Funds
The SEC has unveiled proposed rules creating a tailored framework governing how registered investment advisers and funds may hold crypto assets.
The Securities and Exchange Commission has put forward new rules and amendments designed to establish a dedicated regulatory framework for the custody of cryptocurrency assets by registered investment advisers and regulated funds, including registered investment companies and business development companies.
The proposal signals a significant step by the agency to bring crypto holdings under clearer federal securities law standards, addressing longstanding uncertainty about how existing custody rules apply to digital assets — a sector that has grown substantially but operated in a regulatory gray area.
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Registered investment advisers are already subject to custody requirements under federal securities law, but the existing rules were written before digital assets became a mainstream investment class. The SEC's proposal would tailor those requirements specifically to the unique technical and operational characteristics of crypto assets, which differ meaningfully from traditional securities in how they are held and transferred.
Regulated funds, which face their own set of custody obligations under the Investment Company Act, would also be addressed under the new framework, suggesting the SEC intends a comprehensive approach that covers both advisory and pooled-investment structures handling digital assets.
The proposal is subject to a public comment period before any final rules are adopted, a standard part of the SEC's rulemaking process. Industry participants, including custodians, asset managers, and digital asset firms, are expected to weigh in on the practical implications of the framework. Continue reading at Press Releases.
