SEC proposes crypto custody framework for advisers and regulated funds
TL;DR: The SEC proposed on October 1 a tailored custody framework for digital assets held by registered advisers and regulated funds. The proposal is not final and does not authorize specific fund structures or identify eligible custodians.
The proposal aims to modernize custody rules for digital assets: reduce barriers that limit advisers from offering crypto strategies while maintaining investor protections.
Key operational requirements for managers: establish control over wallets and keys, segregate client assets, implement processes for lost or compromised keys, define valuation methods for digital holdings, and meet audit and oversight standards. These tasks differ from custody of conventional securities even when portfolios appear together on investor dashboards.
Potential effects: clear, workable rules could expand distribution of crypto strategies through existing fund and advisory channels. Misaligned custody obligations could increase costs and narrow the set of supported assets.
Primary industry focus: determine what the final rules will require operationally. The proposal should not be treated as immediate permission to launch new products.
Authors credited by the source: NewsBTC Editorial Team
Published by Holder based on an external source.
