The Securities and Exchange Commission has proposed rules intended to give registered investment advisers and investment funds a defined path for holding cryptocurrency under federal custody requirements.
Reuters reported the proposal on October 1, quoting SEC Chair Paul Atkins as saying the framework would address an area where advisers and funds previously lacked a compliant route. The proposal would still need to complete public comment and Commission rulemaking before it could become binding. Reuters
The custody question is operational as well as legal. Advisers must determine who controls private keys, how assets are segregated, how ownership is verified and what happens if a custodian fails. Traditional securities controls do not map cleanly onto bearer assets that can be transferred irreversibly with a valid signature.
Reporting on the proposal indicates that self-custody could be permitted in limited circumstances when a suitable third-party custodian is unavailable and the adviser can demonstrate the necessary expertise and safeguards. The final text, definitions and conditions will determine whether that route is practical or exceptional.
TOKEN RECON ASSESSMENT
The proposal matters because custody rules can determine whether advisers are able to offer crypto exposure at all. The market should separate a proposed compliant path from an immediate authorization: no firm receives approval merely because the SEC published a rulemaking. The confirmation points are the official text, comment deadline, treatment of qualified custodians and whether the final rule preserves a workable self-custody option.
Source
Reuters: SEC proposes investment-adviser crypto custody rules
