SEC proposes new crypto custody rules for investment advisers and funds, permitting self-custody and state trust company custodians.
Regulation & Gov ·
The Securities and Exchange Commission has proposed new custody rules governing how investment advisers and funds may hold cryptocurrency assets, expanding the permitted custodial arrangements beyond traditional models. The proposal permits self-custody under specified circumstances and authorizes state trust companies to function as qualified custodians for digital assets. This represents a shift in the regulatory framework that previously restricted crypto holdings by regulated investment vehicles to narrower custodial arrangements. The mechanics of the rule would establish conditions under which advisers need not rely exclusively on federally regulated custodians, potentially broadening the landscape for institutional crypto participation. Key details remain to be clarified through the formal rulemaking process, including the specific conditions triggering self-custody eligibility, the approval standards for state trust companies, and the scope of digital assets covered under the regime.