SEC Proposes New Custody Rules for Crypto Assets Held by Advisers
The SEC has unveiled proposed rules creating a tailored custody framework for crypto assets managed by registered investment advisers and regulated funds.
The Securities and Exchange Commission has put forward new rules and amendments designed to establish a structured framework governing how registered investment advisers and regulated funds may hold and safeguard crypto assets under federal securities law.
The proposal targets two primary categories of market participants: registered investment advisers, who manage client portfolios, and regulated funds, which include registered investment companies and business development companies. By tailoring requirements specifically to digital assets, the SEC aims to close perceived regulatory gaps that currently leave crypto holdings in an ambiguous custodial position compared with traditional securities.
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The move reflects the commission's broader effort to bring the fast-growing digital asset industry within established investor-protection standards. Custody rules are considered a cornerstone of securities regulation because they dictate how client assets must be segregated, held, and verified — protections that reduce the risk of loss through fraud, insolvency, or operational failure.
While the full text of the proposed rules spans a wider scope, the core thrust is ensuring that advisers and funds applying existing custody obligations to crypto assets have clear, workable compliance pathways. The proposal would be subject to a public comment period before any final rules are adopted, a standard step in the SEC's rulemaking process.
The commission's action signals continued regulatory focus on digital assets at a time when both institutional adoption and high-profile industry failures have intensified calls for clearer oversight. Continue reading at Press Releases.
