Key Highlights
- The U.S. Securities and Exchange Commission has proposed new crypto custody rules.
- The framework could allow self-custody in certain circumstances.
- State trust companies could be permitted to hold clients’ crypto assets.
SEC Proposes New Crypto Custody Framework
The U.S. Securities and Exchange Commission has proposed new cryptocurrency custody rules covering registered investment advisers and regulated funds. The framework would establish how certain investment professionals and funds may safeguard digital assets on behalf of clients.
A central feature of the proposal is the potential to permit self-custody in some instances. This would create circumstances in which crypto assets could be held directly rather than being placed exclusively with an external custody provider.
State Trust Companies Could Hold Crypto Assets
The proposed framework would also enable state trust companies to hold client crypto assets. This could expand the range of institutions eligible to provide custody services for digital assets connected to registered investment advisers and regulated funds.
The SEC’s proposal addresses the custody of crypto assets within the regulatory framework governing investment advisers and funds. Because the rules are proposed rather than final, the framework could remain subject to further regulatory action before any provisions take effect.
Why This Matters
Crypto custody is a key issue for investment advisers, regulated funds and clients seeking to use digital assets within an established financial structure. The SEC proposal is significant because it outlines both a possible role for state trust companies and limited circumstances in which self-custody could be available. The next steps will depend on the SEC’s consideration and development of the proposed rules.
Frequently Asked Questions
What did the SEC propose?
The U.S. Securities and Exchange Commission proposed new crypto custody rules for registered investment advisers and regulated funds.
Would the proposal allow self-custody?
Yes. The framework would enable self-custody in some instances.
Which institutions could hold client crypto assets?
The proposal would enable state trust companies to hold client crypto assets.
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