SEC proposes framework allowing investment advisers and regulated funds to custody crypto assets, but government shutdown pauses formal review and advancement.
Regulation & Gov ·
The SEC proposed a regulatory framework on October 1 enabling investment advisers and regulated funds to custody crypto assets under existing rules, marking a step toward clearer guidance. However, the ongoing government shutdown has suspended formal review and advancement of the proposal pending restoration of agency funding.
The framework aims to accommodate institutional participation in crypto markets by clarifying custody arrangements without requiring entirely new regulations. By permitting existing compliance structures to apply, the approach intends to reduce barriers for advisers and funds seeking to hold digital assets on behalf of clients.
The timing of the shutdown leaves the proposal's status uncertain. Until agency operations resume, no formal comment period or regulatory movement is possible, leaving the timeline for implementation unknown and the practical effects of the framework deferred.