SEC proposes tailored crypto custody framework for advisers and regulated funds
TL;DR: SEC proposes a tailored crypto custody framework for registered advisers and regulated funds; the changes are not final.
Scope and Intent of the Proposal
The SEC released a proposal on October 1 to modernize parts of federal custody rules for digital assets held by registered advisers and regulated funds. The stated goal: reduce obstacles that currently prevent advisers from offering certain crypto strategies while preserving investor protections.
The proposal does not immediately authorize all fund structures or determine which institutions qualify as custodians. It sets a regulatory direction without granting blanket permission.
Operational Requirements Beyond Wallets
Investment managers need more than wallet technology. They must prove control over assets, segregate client holdings, manage incidents such as lost or compromised keys, value digital assets reliably, and meet external oversight requirements. These functions differ from custody of conventional securities, even when portfolios appear together in a single investor interface.
Potential Outcomes for Market Access
A well-calibrated final regime could enable broader distribution of crypto strategies through existing fund and advisory channels. A misaligned custody requirement could raise costs or reduce the set of assets institutions support. The central question for industry participants is the operational demands of the final rules, not treating the proposal as immediate approval.
Authors credited by the source: NewsBTC Editorial Team
Published by Holder based on an external source.
