Crypto Brief

Lowenstein Crypto advises leading digital asset and cryptocurrency projects, exchanges, and trading firms. Our practice covers regulatory advice, transactions and structuring advice, investigations, and adversarial matters including commercial disputes, bankruptcy, and related litigation. As these markets continue their rapid growth and market participants continue to evolve and mature their businesses, we are providing this weekly digest as a resource that highlights and summarizes a selection of key recent legal regulatory developments.

SEC Prepares for Amendments to Crypto Asset Custody Rules for Investment Advisers 

On August 25, the Securities and Exchange Commission (SEC) sent a new proposal to the White House in connection with rules for investment advisers holding digital assets on behalf of clients. The SEC’s Division of Investment Management (Division) is considering recommending that the SEC propose amendments to the existing rules and/or propose new rules under the Investment Advisers Act of 1940 and the Investment Company Act of 1940 in an effort to improve and modernize regulations concerning the custody of crypto assets on behalf of adviser client and fund assets. The Division notes that rulemaking would clarify the framework for the custody of crypto assets for investment advisers and investment companies and modernize the rules to remove outdated requirements and burdens that are not required to provide investor protections. See the pending proposal here.