SEC Proposes Crypto Custody Rules for Advisers and Funds
The SEC has unveiled proposed rules creating a tailored custody framework for crypto assets held by registered investment advisers and regulated funds.
The Securities and Exchange Commission has put forward new rules and amendments designed to establish a structured framework governing how registered investment advisers and regulated funds may hold and safeguard crypto assets under federal securities law.
The proposal targets two categories of market participants: registered investment advisers, who manage client portfolios and are subject to existing SEC oversight, and regulated funds, which include registered investment companies and business development companies. The move signals the agency's intent to bring digital asset custody practices more firmly within the bounds of established securities regulation.
Read more SEC Commissioner Uyeda Comments on Closed-End Fund Rule Changes →
Crypto custody has long been a contested regulatory gray area, as the unique technical characteristics of digital assets — including private key management and blockchain-based settlement — do not map cleanly onto traditional custodial arrangements designed for stocks and bonds. The SEC's proposal appears aimed at bridging that gap with rules tailored specifically to the asset class.
The rulemaking comes as federal regulators have intensified scrutiny of the digital asset industry following a series of high-profile collapses and fraud cases that exposed significant gaps in how client crypto holdings were protected. A formal custody framework could impose stricter requirements on who qualifies as a qualified custodian for digital assets and what standards those custodians must meet.
The full scope of the proposed amendments, including specific compliance requirements and comment periods, would be detailed in the official release. Continue reading at Press Releases.
