TL;DR
Get hardware and tech essentials delivered free — and shop member deals
- Fast, free delivery on millions of items
- Access to Prime Big Deal Days deals on October 6–7
- Prime Video, Amazon Music and more included
The SEC proposed a rule on Thursday setting out how investment advisers and regulated funds may safeguard crypto assets, keep records and make disclosures. It would allow state-chartered trusts to act as custodians and permit adviser self-custody only in limited circumstances, subject to conditions and quarterly review. The proposal is open for public comment for 60 days.
The U.S. Securities and Exchange Commission proposed a rule Thursday to clarify how investment advisers and regulated funds may hold and safeguard clients’ crypto assets, including by using state-chartered trusts as custodians. The proposal also allows limited adviser self-custody when a qualified custodian is unavailable, subject to requirements; it is open for 60 days of public comment before the agency decides whether to adopt it.
The SEC’s 760-page proposal addresses which firms may hold crypto assets for investment clients and how advisers and funds must handle recordkeeping, disclosures and audits. The agency said the aim is to provide a regulatory framework for digital assets under custody rules that were developed around traditional assets. The proposal is not yet a final rule, and its requirements could change following public comments.
Under the proposed approach, advisers could hold client crypto themselves only if they cannot find a qualified custodian willing to take the assets and meet specified expertise requirements. An SEC official said advisers would have to reassess the situation every quarter to determine whether a custodian had become available. The official described the circumstance as likely to be unusual, but said it could arise for a newly launched token that custodians do not yet support.
The proposal uses “self-custody” to describe an investment adviser holding client assets, rather than the broader ways crypto companies and users often use that term. The SEC also proposes permitting state-chartered trusts to serve as custodians. The source report does not specify the final rule’s implementation date; that would depend on subsequent agency action.
New Options for Crypto Safekeeping
Custody rules affect how investment advisers and regulated funds protect assets entrusted to them, and which providers they can use to do so. A final rule could shape the operational choices available to firms managing crypto for clients, including whether they rely on a qualified custodian or, in narrowly defined cases, hold assets themselves. The proposed recordkeeping, disclosure and audit provisions would also affect how firms document and oversee those holdings.
For clients, the proposal’s practical effect would depend on the safeguards that survive the comment process and how the SEC defines the conditions for each custody arrangement. The self-custody provision is not a broad permission for advisers to hold client crypto whenever they prefer: the proposal ties it to custodian availability and adviser expertise, with quarterly reassessment. The rule remains a proposal, not a guarantee that any particular asset or firm will qualify.
As an affiliate, we earn on qualifying purchases.
SEC’s Broader Digital-Asset Agenda
The custody proposal is part of a series of SEC actions on digital-asset regulation. According to CoinDesk’s report, it follows the agency’s recent publication of an Innovation Exemption for tokenized securities and its proposed Regulation Crypto Asset, which addresses fundraising using digital assets. The agency has described these efforts as part of a wider crypto agenda.
The proposal also comes as Commissioner Hester Peirce, who led the SEC’s Crypto Task Force, was scheduled to leave the agency on Friday, Oct. 2, to become a professor in Virginia. CoinDesk reported that the SEC had earlier changed its quorum requirements so that two commissioners, rather than three, could form a quorum. These developments provide institutional context, but they do not determine whether or what form the custody proposal will take as a final rule.
“The proposal “would provide a clear regulatory framework for the custody of crypto assets, giving investment advisers and funds a compliant pathway where none existed before — and replacing the grey of uncertainty created by custody rules crafted for a bygone era.””
— SEC Chairman Paul Atkins, in a statement
As an affiliate, we earn on qualifying purchases.
Details Await Public Review
The proposal’s language may change after the 60-day comment period, and the SEC has not yet adopted a final rule. It remains unclear which providers will meet the definition of a qualified custodian under the final framework, how the expertise conditions for adviser self-custody will be applied, and what documentation or audit practices firms will need to satisfy.
The proposal’s practical reach is also uncertain. The SEC official cited a newly launched token unsupported by custodians as a possible reason an adviser might seek self-custody, but the source report does not establish how frequently such cases would arise. No final compliance timetable or specific outcome for individual firms and assets is confirmed.
As an affiliate, we earn on qualifying purchases.
Comment Period Before Final Action
The SEC will accept public comments for 60 days on the proposed rule. Advisers, funds, custodians and other interested parties can respond to its proposed eligibility standards, safeguards and reporting requirements. After reviewing feedback, the agency may revise the text and decide whether to adopt a final rule. The source material does not give a date for that decision, so the final requirements and their effective date remain pending.
As an affiliate, we earn on qualifying purchases.
Key Questions
Has the SEC’s crypto custody rule taken effect?
No. The SEC has proposed the rule and opened it for a 60-day public comment period. It must take further action before the proposal becomes a final rule.
Would investment advisers be able to hold client crypto themselves?
The proposal would allow this only in limited circumstances: an adviser must be unable to find a qualified custodian willing to hold the assets and must meet specified expertise requirements. The adviser would also have to check quarterly whether a custodian had become available.
Who could serve as a crypto custodian under the proposal?
The proposal would permit state-chartered trusts to act as custodians. It also sets out a framework for determining how firms may hold client crypto, though the final requirements could change after comments.
When will the SEC decide whether to finalize the rule?
The SEC has opened a 60-day comment period, but the source report does not give a date for a final decision or an effective date. The agency will need to review comments before deciding what to do next.
Source: rss
Halloween Picks
halloween
As an affiliate, we earn on qualifying purchases.
