Advisers and Funds Could Get Official SEC Crypto Custody Path

ByNoel Saldanha
The U.S. Securities and Exchange Commission headquarters in Washington, D.C., as Advisers and Funds await crypto custody

The Securities and Exchange Commission on Thursday proposed a crypto custody rule giving Advisers and Funds a formal path to hold digital assets for clients.

Key Takeaways

  • The SEC proposed a crypto custody rule giving advisers and funds a formal path to hold digital assets for clients
  • The proposal aims to define which crypto custody arrangements qualify under federal standards
  • The framework would let advisers and funds use crypto-specific custodians under clearer compliance terms, Reuters reported
  • The proposal enters a public comment period before any final rule takes effect

The Securities and Exchange Commission said the measure creates “a tailored framework for the custody of crypto assets,” according to Reuters, which first reported the filing.

The proposal arrives as Commissioner Hester Peirce, who led the agency’s inaugural Crypto Task Force, departs the SEC, making it the unit’s last major output under her watch.

Custody is the legal and operational arrangement governing who holds an investor’s assets on their behalf, intended to prevent advisers from mishandling or losing client funds.

Under rules written before digital assets existed, advisers faced uncertainty over whether exchanges, specialized crypto custodians or self-custody wallets met federal custody standards.

Thursday’s proposal, filed with the SEC, aims to define which arrangements qualify.

Why Advisers And Funds Have Waited Years For This

Advisers managing client money have avoided crypto allocations partly because custody uncertainty created compliance risk, not because of price volatility. The 1940 Investment Advisers Act requires advisers to keep client assets with a “qualified custodian,” a term never written with blockchain-based assets in mind.

The proposal would let advisers and funds use crypto-specific custodians under clearer compliance terms rather than forcing a fit with decades-old banking definitions.

The practical question for independent operators is whether the eventual rule recognizes the custody setups they can actually use, including specialized providers and self-custody wallets.

Also Read: Buterin Reveals Ethereum’s Post-Hegota Roadmap

Peirce’s Task Force Leaves A Paper Trail

Peirce built the Crypto Task Force after taking charge of the agency’s digital-assets agenda, pushing proposals aimed at giving the industry regulatory clarity rather than enforcement actions. Her exit closes a chapter that began with a mandate to replace ad hoc lawsuits with defined rules, and Thursday’s custody framework represents one of the unit’s final deliverables before new leadership takes the file forward.

What Advisers And Funds Will Watch Next

The proposal now enters a public comment period before any final rule takes effect, and the length of that window will determine how quickly advisers can act on it.

The framework specifically targets how registered investment advisers and regulated funds custody crypto, suggesting the SEC wants uniform treatment across both categories rather than separate standards.

Read Next: Bad Rules Could Quietly Make Self-Custody The Hard Option, TEXITcoin Founder Says

Similar Posts