SEC Proposes New Framework for Crypto Asset Custody by Investment Advisers
- The SEC has proposed a standalone framework for the custody of crypto assets by registered investment advisers and affiliated funds.
- Investment advisers could self-custody digital assets under specified conditions or use state-registered trust companies as custodians.
- The proposal will be open for public comment for a period of 60 days after its publication in the Federal Register.
- The framework operates under the Investment Advisers Act of 1940 and the Investment Company Act of 1940.
- SEC Chair Paul Atkins stated that existing regulations have not kept pace with developments in the digital-asset market.
This new regulatory initiative aims to eliminate barriers that restrict investment advisers from offering crypto-related services, thereby creating a compliant mechanism for asset custody. The SEC also plans to update requirements related to audits, recordkeeping, and disclosures.
The SEC’s proposal marks a significant step toward establishing clear guidelines for crypto asset custody, reflecting the evolving landscape of digital finance as noted by SEC Chair Paul Atkins. (Source)
