SEC Crypto Custody Proposal Reduces Institutional Risk
The SEC proposed rules allowing self-custody and expanded qualified custodians, shifting from its 2023 stance. The move reduces regulatory uncertainty for advisers and funds holding crypto.
The U.S. Securities and Exchange Commission under Chairman Paul S. Atkins proposed new rules that would give investment advisers and regulated funds a compliant path to hold crypto assets. The framework allows self-custody under specific conditions and expands the list of qualified custodians to include state trust companies.
The proposal marks a sharp turn from a 2023 version that effectively blocked most advisers from holding crypto directly. The SEC said the shift reflects a more permissive regulatory stance and is intended to cement the United States as a global crypto hub.
Bitcoin (BTC) and Ethereum (ETH), the two largest digital assets by market value, would be directly affected by the change. Advisers that currently route crypto through offshore or third-party arrangements may now have a domestic compliance option, reducing operational and legal risk.
What would make the risk recede further: final adoption without major structural changes. The SEC has not set a timeline for the comment period or final vote. A delay or legal challenge from state-level regulators could prolong the uncertainty the proposal aims to resolve.
The proposal replaces what the SEC called "grey uncertainty" with a tailored compliance pathway for advisers seeking to allocate to digital assets.
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