SEC PROPOSES CRYPTO CUSTODY FRAMEWORK FOR INVESTMENT ADVISERS AND FUNDS

Summary from the TLDR Crypto newsletter

The SEC under Chair Paul Atkins has proposed a custody rule specifically for crypto assets held by investment advisers and registered funds, creating a compliant pathway where RIAs and fund managers previously had none. The proposal permits self-custody of crypto in certain circumstances and broadens the qualified custodian category to include state trust companies, replacing rules designed for traditional securities that left digital asset custody in regulatory grey. Atkins framed the proposal as overdue modernization, describing crypto as a multi-trillion-dollar asset class that has outgrown rules "crafted for a bygone era." The framework removes one of the primary structural barriers to institutional crypto adoption by giving regulated entities a defined compliance path for digital asset custody.