According to U.Today, the U.S. Securities and Exchange Commission has proposed a sweeping new crypto custody framework that could make it easier for registered investment advisers and regulated funds to hold digital assets on behalf of clients.
The proposal aims to address current regulatory challenges faced by investment advisers and fund sponsors seeking to manage clients’ digital asset holdings. Under the framework, certain registered entities would be permitted to custody client-held crypto under existing oversight rules, provided they meet specified criteria related to security practices, recordkeeping, and reporting.
The SEC did not specify timelines for implementation or require changes to how most non-registered parties must operate. The agency said the framework is intended to clarify regulatory expectations for those already subject to investment adviser regulations while supporting market integrity and investor protection.
Registered investment advisers and funds that comply with current disclosure, fiduciary, and custody standards would need only follow updated guidance related to digital asset custody practices. No new licensing or registration requirements are introduced for these entities under the proposal.
