SEC Proposes Rules That Could Change How Funds Custody Crypto

SEC Chairman Paul Atkins said that the proposed rule could "replace the grey of uncertainty created by custody rules crafted for a bygone era." Regulatory efforts continue following the CLARITY Act’s failure to advance. The US Securities and Exchange Commission has now proposed new rules to create a clearer framework for the custody of crypto assets by registered investment advisers and regulated funds. The SEC said the changes would address how such assets are held under federal securities laws. Addressing Crypto Custody Uncertainty The proposal essentially aims to remove some regulatory barriers that currently affect advisers providing crypto-related investment advice. Under it, digital assets could be held through state trust companies in certain circumstances. The rules would also allow crypto assets to be held through self-custody arrangements under specific conditions. The SEC said the proposal gives regulated funds more options for offering investment strategies linked to crypto assets. It also updates certain requirements related to financial statement audits for registered investment advisers and broker-dealer custodial services for regulated funds. SEC Chairman Paul S. At...