The U.S. Securities and Exchange Commission (SEC) has issued a proposed rule aimed at clarifying how investment firms handle and keep customer crypto assets.
SEC Chairman Paul Atkins stated that the proposal would establish a clear regulatory framework for crypto asset custody. This is intended to provide investment advisers and funds with a compliant pathway and replace uncertainty from rules designed for traditional assets.
The newly proposed approach outlines which companies can properly hold crypto assets, how investment advisers and regulated funds must keep records, and what federal disclosures are required. It also provides clarifications regarding industry practices and auditing requirements.
According to Atkins, existing custody rules were created to protect advisory clients and regulated funds from loss, theft, misuse, and misappropriation, but they previously accounted only for traditional assets.
The proposed rule is open for a 60-day public comment period. Under certain circumstances, it would allow for the self-custody of crypto assets and permit the use of state-chartered trusts as custodians.
This regulatory step coincides with the upcoming departure of Commissioner Hester Peirce, who led the agency's Crypto Task Force since its inception and exits the agency to become a professor in Virginia. With this action on custody, the SEC has addressed all major topics on the crypto agenda set out by Atkins.
