The U.S. Securities and Exchange Commission has proposed new rules governing how investment advisers and regulated funds can hold cryptocurrency assets. The framework would create dedicated custody options while updating requirements originally written for traditional financial assets.
SEC Chairman Paul Atkins connected the proposal to cryptocurrency's evolution from a niche market into a major asset class, noting that advisers need clearer pathways to safeguard digital assets while complying with federal securities laws.
Self-Custody and State Trust Company Options
Under the proposal, registered investment advisers could self-custody crypto assets if they meet specified requirements. The framework would also apply to registered investment companies and business development companies.
The SEC would additionally permit advisers and regulated funds to use qualifying state trust companies for crypto custody, offering another option alongside banks and other permitted custodians. The agency had previously provided conditional no-action relief for certain state-chartered trust companies holding crypto assets through 2025 staff guidance.
Scope of the Rulemaking
The proposal would amend requirements under the Investment Advisers Act of 1940 and the Investment Company Act of 1940. Changes would also address financial statement audits for registered advisers and broker-dealer custody services used by regulated funds.
The custody framework addresses how regulated firms hold crypto rather than determining whether particular tokens qualify as securities. Classification questions remain subject to separate SEC interpretations and rules.
Next Steps
Public comments will remain open for 60 days after the proposal appears in the Federal Register. The Commission can revise the requirements after reviewing feedback before deciding whether to adopt final rules.
