SEC proposes crypto custody rules for investment advisers and funds
The SEC proposed a tailored crypto custody framework for registered advisers and regulated funds. The rules are not final.
Scope and intent
Released October 1, the proposal would modernise federal safeguarding rules for digital assets. The SEC states the goal: remove obstacles that prevent advisers from offering certain crypto strategies while maintaining investor protections. The proposal does not authorise every fund structure and does not settle which institutions qualify as custodians.
Operational implications for managers
Custody demands extend beyond wallet technology: establish control over client assets, segregate client assets, address lost or compromised keys, value holdings, and meet external oversight. These tasks differ from custody of conventional securities even when both portfolios appear together on an investor’s screen.
Potential outcomes
A final regime could facilitate distribution of crypto investments through existing fund and advisory channels. Stringent or poorly aligned custody requirements could raise costs or narrow the range of assets institutions support. The critical issue for industry participants is the operational content of the final rules, not treating the proposal as permission already granted.
Authors credited by the source: NewsBTC Editorial Team
Published by Holder based on an external source.
