SEC Proposes Crypto Custody Rules for Advisers and Funds

BitcoinWorld

SEC Proposes Crypto Custody Rules for Advisers and Funds

The U.S. Securities and Exchange Commission has proposed new rules governing how registered investment advisers and regulated funds custody crypto assets, an effort Chairman Paul Atkins said would replace “the grey of uncertainty created by custody rules crafted for a bygone era,” according to Cryptopotato. The proposal, issued under the Investment Advisers Act of 1940 and the Investment Company Act of 1940, is designed to clarify which arrangements satisfy the “qualified custodian” standard that has long kept many firms from offering digital-asset strategies at all.

The SEC proposed a framework letting registered investment advisers and regulated funds custody crypto through state trust companies and, under specific conditions, self-custody. The plan also updates financial-statement audit and broker-dealer custodial requirements. It is not final and will open a 60-day public comment period.

Atkins said the agency’s existing custody rules largely predate the internet and do not adequately address newer crypto assets. He also pointed to a practical bottleneck: custodial services for a crypto asset can take months to become available after launch, creating problems for advisers and funds trying to build strategies around those assets.