SEC Proposes Crypto Custody Rules With a Self-Custody Option

Announced on October 1, the framework covers registered investment advisers and regulated funds, including registered investment companies and business development companies. It would also establish conditions for using state trust companies to safeguard crypto assets.

For clients, these changes could widen the investments available through a manager. They would also make the manager’s custody arrangements important to understand, particularly when the firm selecting an investment holds the assets itself.

A token can arrive before a custodian

Crypto custody involves safeguarding the credentials that authorize transactions and controlling who can use them. For an investment firm, deciding to buy an asset is only part of the job. It also needs a lawful arrangement for protecting the client’s holdings.

That can become an obstacle when an asset reaches the market before a permitted custodian supports it. SEC Chairman Paul Atkins said in his Read Entire Article