SEC Proposes Crypto Custody Framework for Investment Advisers and Funds

The U.S. Securities and Exchange Commission on October 1 proposed new rules and amendments for the custody of crypto assets by registered investment advisers and regulated funds.

The proposal would create a tailored framework for crypto custody under the federal securities laws. It is a proposed rulemaking rather than a final rule, meaning its requirements would not take effect unless the SEC adopts a final version.

Among the measures outlined, the SEC would permit self-custody of crypto assets in specified circumstances and would allow state trust companies to serve as custodians. The proposal also includes related changes to recordkeeping and disclosure requirements.

What the SEC proposal covers

The proposed rules and amendments focus on how registered investment advisers and regulated funds may custody crypto assets. The SEC’s approach would set out conditions for custody arrangements rather than treating every crypto custody model in the same way.

The framework contemplates self-custody in certain circumstances. It also recognizes state trust companies as potential custodians under the proposed approach.

The SEC additionally proposed updates to recordkeeping and disclosure requirements connected to crypto custody. The available materials do not establish final obligations, because the rulemaking remains at the proposal stage.

• Self-custody would be permitted under specified conditions.
• State trust companies could act as custodians.
• The proposal includes recordkeeping and disclosure amendments.

Proposal enters public-comment stage

The SEC said the public-comment period will remain open for 60 days after the proposal is published in the Federal Register. Comments received during that period may inform the agency’s next steps.

The announcement does not itself finalize new custody standards. Market participants affected by the proposal will need to follow the rulemaking process and any final action by the SEC.

Context for digital-asset policy

Custody has been a central operational question for institutions offering or managing digital-asset exposure. The proposed framework addresses that issue specifically for registered investment advisers and regulated funds.

The proposal arrives as policy discussions continue across the digital-asset sector, including legislative activity related to market structure. Its eventual impact will depend on the SEC’s final rulemaking decisions after the comment process.

Continue reading: legislative activity related to crypto market structure on BTCNews.

Continue reading: digital-asset services for institutions on BTCNews.

Sources

• U.S. Securities and Exchange Commission: SEC Proposal Would Address How Investment Advisers and Funds Can Custody Crypto Assets Under the Federal Securities Laws
• U.S. Securities and Exchange Commission: Proposed rule: Adviser and Regulated Fund Custody Rules; Crypto Custody Rules
• CoinDesk: SEC maps out crypto custody in new proposal that furthers its digital assets agenda

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