The U.S. Securities and Exchange Commission has approved proposed custody rule amendments that would expand how registered investment advisers and regulated funds may safeguard crypto assets. The proposal responds to the limited availability and technological capabilities of traditional qualified custodians by creating additional custody options, building on the Commission’s broader effort to establish rules for holding crypto assets. Under limited conditions, an adviser could act as custodian for client or regulated fund crypto assets after determining that no permitted custodian is available, with that determination reassessed quarterly. Eligible state trust companies could also serve as permitted crypto custodians, provided the adviser or fund conducts due inquiry initially and annually into the company’s state authorization and safeguards against theft, loss, misuse and misappropriation. The amendments would apply only to crypto assets within the relevant custody rules, including funds or securities under the adviser rule and securities or similar investments under the investment company rules.
U.S. Securities and Exchange Commission proposes conditional adviser crypto custody and state trust company option
The U.S. Securities and Exchange Commission has proposed wider crypto custody options for registered investment advisers and regulated funds. Advisers could conditionally hold covered crypto assets when no permitted custodian is available, while eligible state trust companies could provide custody subject to authorization and safeguarding checks.