SEC Proposes New Rules for Crypto Asset Custody
Written with artificial intelligence.
The U.S. Securities and Exchange Commission (SEC) has proposed a regulatory framework for the custody of crypto assets by registered investment advisors and regulated funds. Under certain conditions, advisors may self-custody crypto assets, and state trust companies can serve as custodians.
Overview of the Proposal
On October 2, the U.S. Securities and Exchange Commission (SEC) announced a proposal aimed at establishing a regulatory framework for the custody of crypto assets by registered investment advisors and regulated funds. This initiative is designed to address the growing need for secure management of digital assets.
Key Features
The proposal includes:
- Self-Custody: Under specific conditions, investment advisors may be permitted to self-custody crypto assets. This includes having the necessary expertise in crypto custody and the absence of qualified third-party custodians.
- State Trust Companies: The proposal allows state trust companies to act as custodians for customer and regulated fund crypto assets.
- Quarterly Assessments: Advisors must conduct quarterly evaluations to maintain compliance with self-custody requirements.
Next Steps
Following its publication in the Federal Register, there will be a 60-day public comment period on the proposal. SEC Chairman Paul Atkins emphasized that this new regulatory path will provide investment advisors and funds with previously unavailable compliance options.