SEC publishes new crypto custody rules

The US Securities and Exchange Commission has proposed new rules designed to establish a dedicated legal framework for crypto custody within the wealth management and advisory market.

The proposed framework would apply to investment advisers and regulated funds.

If accepted, the new framework would enable advisers to work with a broader range of crypto-related products.

Similalry, fund promoters would be able to offer investors access to a broader range of crypto-related products and vehicles.

In a broad sense, the proposed framework is designed to bring crypto assets and funds into the same regulated territory as other investment vehicles when it comes to custody. 

More specifically, it includes rules that mandate financial statement audits for registered investment advisers and broker dealers’ custodial services. It will also allow crypto assets to be held in self-custody under designated circumstances. 

The proposal was launched by SEC chairman Paul Atkins who noted that the crypto asset market has evolved since the creation of bitcoin in 2008 and is no longer a “niche curioisity” but a trillion-dollar asset class.

Atkins also added that the framework for crypto custody is designed to give legal certainty and to encourage more adoption of crypto assets from institutional investors. 

“Today’s proposal would provide a clear regulatory framework for the custody of crypto assets, giving investment advisers and funds a compliant pathway where none existed before—and replacing the grey of uncertainty created by custody rules crafted for a bygone era,” said Atkins. 

Source: https://www.finextra.com/newsarticle/48530/sec-publishes-new-crypto-custody-rules