SEC Proposes Rules That Could Change How Funds Custody Crypto

The U.S. Securities and Exchange Commission has proposed new rules aimed at clarifying how registered investment advisers and regulated funds can custody crypto assets. The SEC says the framework is designed to fit federal securities laws, addressing uncertainty that has complicated crypto-related advisory work. Under the proposal, digital assets could be held through state trust companies in certain circumstances, and it would also permit self-custody arrangements if specific conditions are met. The SEC also would update requirements tied to financial-statement audits for advisers and custody services for regulated funds. SEC Chair Paul S. Atkins noted that existing custody rules predate the internet and that custodial services for new crypto assets can take months to become available.