SEC Sends Proposal to White House to Overhaul Crypto Custody Rules for Investment Firms

The U.S. Securities and Exchange Commission (SEC) sent its proposed crypto rules for investment firms to the White House. The proposed rulemaking aims to address how these firms can custody crypto assets, even as the Commission continues to provide regulatory clarity for the crypto industry.

SEC Sends Crypto Custody Proposal To The White House

A public notice shows that the Commission has sent its proposed rule to the White House. The agency is proposing rulemaking to amend the custody rules, especially as they relate to how investment firms can custody crypto.

The SEC seeks to amend the existing rules and possibly propose new rules under the Investment Advisers Act and Investment Company Act to “improve and modernize the regulations around the custody of advisory client and fund assets, including to address in each case crypto assets.”

The Commission noted that these investment advisers and companies have already raised questions about how to hold crypto assets in compliance with the current custody requirements. As such, the agency aims to use the rulemaking to clarify the framework for the custody of crypto assets for these stakeholders.

This move comes as the SEC continues to provide clarity for the crypto industry as the CLARITY Act stalls. The SEC recently released the proposed ‘Reg Crypto’ framework, which provides a way for crypto startups to raise capital with certain exemptions under the Securities Act.