Crypto Regulation: A16z Urges SEC Update

Andreessen Horowitz Advocates for SEC Crypto Custody Rule Update

• Andreessen Horowitz (a16z) submitted a formal letter to the SEC on April 9, advocating for changes in how registered investment advisers (RIAs) handle digital assets.
• The firm suggests RIAs should be allowed to directly hold crypto assets under specific conditions and safeguards.
• A16z proposes that RIAs be permitted to self-custody security tokens without conflicting with existing Custody Rules or fiduciary duties.
• The submission highlights the need for new guidance due to the unique economic or governance rights associated with crypto assets.
• Then-Acting SEC Chair Mark Uyeda indicated potential revisions of the $100 million threshold for RIA registration.

Andreessen Horowitz is urging the SEC to update custody rules, allowing RIAs more flexibility in managing crypto assets, as current regulations do not account for their unique characteristics. The firm’s proposals include permitting self-custody of security tokens and selecting third-party custodians that enable exercising economic rights.