SEC Readies Updated Rule for Crypto Custody

Federal securities regulators issued a proposal on updated cryptocurrency custody rules for investment advisors.

The Securities and Exchange Commission (SEC) sent its proposal to the White House’s Office of Management and Budget (OMB) on Tuesday (Aug. 25) per a post on its website.

“This proposed rules and rule amendments would improve and modernize the regulations around custody of investment adviser client assets and fund assets, including to address crypto assets,” the SEC said. “Currently, investment advisers and investment companies have raised questions about how to hold crypto assets in compliance with the current commission custody requirements.”

The commission added that the rulemaking would clarify the framework for crypto asset custody for investment advisers and investment companies, while also making other updates to “remove burdens from certain outdated provisions that are no longer needed to provide investor protection given the evolution in the markets and security trading and holding practices.”

According to a Wednesday (Aug. 26) Bloomberg News report, full details of the new proposal won’t be made known until the OMB reviews the SEC rule. Once it goes back to the agency, the all-Republican commission will vote on it and release it to the public.