The Securities and Exchange Commission on Wednesday proposed a tailored framework governing how registered investment advisers and regulated funds can custody crypto, aiming to replace years of regulatory ambiguity with a clear compliance path.
Advisers are required to keep client assets with "qualified custodians" that meet strict safekeeping standards, but it has long been unclear which crypto arrangements satisfy that bar, leaving many firms hesitant to offer digital-asset strategies at all.
The proposal, issued under the Investment Advisers Act of 1940 and the Investment Company Act of 1940, would ease that bottleneck in several ways:
- Permit crypto assets to be held in self-custody under certain conditions
- Allow state trust companies to serve as custodians for client and fund crypto
- Update rules around financial-statement audits for advisers
- Update rules around broker-dealer custodial services for funds
The stated goal is to widen investor access to crypto strategies by removing barriers that have kept advisers on the sidelines.
