SEC moves to clear custody hurdle for advisers offering crypto
The SEC proposed easing custody rules for crypto held by investment advisers and funds, aiming to remove a major barrier to offering digital asset exposure. Advisers could self-custody client crypto when no eligible custodian is available, but only if they reassess that status quarterly, transfer assets once a custodian is available, and follow strict safeguards for private keys, cybersecurity, segregation of client assets, and dual approval for transfers. State trust companies could also qualify as crypto custodians if authorized by state regulators and subject to asset-safeguarding, segregation, and reporting requirements. Funds could use adviser self-custody under board oversight. The SEC also proposed related audit, recordkeeping, and disclosure changes, with public comments open for 60 days.
