US SEC proposes amendments for custody of cryptoassets rules
02 October 2026 US
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The US Securities and Exchange Commission (SEC) has proposed new rules and amendments to provide a tailored framework for the custody of cryptoassets for registered investment advisers and regulated funds — such as registered investment companies and business development companies.
The proposal aims to modernise custody rules and expand investor choice by removing regulatory barriers that inhibit the adviser’s ability to provide crypto-related investment advice.
It would also allow regulated funds to offer clients access to a wider range of cryptoasset-related investment strategies.
In a recent statement addressing the move, SEC Chairman Paul S. Atkins, says: “Since the advent of Bitcoin in 2008, the cryptoasset market has grown from a niche curiosity into a multi-trillion-dollar asset class to which investors actively seek exposure.
“Unfortunately, our rules and regulations have not kept pace. To that end, [the] proposal would provide a clear regulatory framework for the custody of cryptoassets, giving investment advisers and funds a compliant pathway where none existed before — and replacing the grey of uncertainty created by custody rules crafted for a bygone era.”
The proposed rules and amendments under the Investment Advisers Act of 1940 and the Investment Company Act of 1940, aim to better address current industry practices and update a number of requirements relating to, among other things, financial statement audits for registered investment advisers and broker-dealer custodial services for regulated funds.
The proposal would also permit cryptoassets to be held in self-custody under certain circumstances and allow the use of state trust companies as custodians for client and regulated fund cryptoassets.
The public comment period will remain open for 60 days following the publication of the SEC’s proposing release in the Federal Register.
James Delaney, managing director, Asset Management Regulation at the Alternative Investment Management Association, believes the latest proposals “marks meaningful progress”.
“AIMA has been calling for greater clarity and more workable custody rules for some time, and it is encouraging to see several of our recommendations reflected in the proposal,” he explains.
“Opening new routes for safeguarded self-custody and custody through state trust companies could help remove some of the practical barriers investment advisers face, while retaining important safeguards for investors.
“There is still plenty to work through, and we will be testing the details to help ensure the final framework strikes the right balance between protecting investors and giving investment advisers the flexibility they need to put their investment strategies into practice.”
The proposal aims to modernise custody rules and expand investor choice by removing regulatory barriers that inhibit the adviser’s ability to provide crypto-related investment advice.
It would also allow regulated funds to offer clients access to a wider range of cryptoasset-related investment strategies.
In a recent statement addressing the move, SEC Chairman Paul S. Atkins, says: “Since the advent of Bitcoin in 2008, the cryptoasset market has grown from a niche curiosity into a multi-trillion-dollar asset class to which investors actively seek exposure.
“Unfortunately, our rules and regulations have not kept pace. To that end, [the] proposal would provide a clear regulatory framework for the custody of cryptoassets, giving investment advisers and funds a compliant pathway where none existed before — and replacing the grey of uncertainty created by custody rules crafted for a bygone era.”
The proposed rules and amendments under the Investment Advisers Act of 1940 and the Investment Company Act of 1940, aim to better address current industry practices and update a number of requirements relating to, among other things, financial statement audits for registered investment advisers and broker-dealer custodial services for regulated funds.
The proposal would also permit cryptoassets to be held in self-custody under certain circumstances and allow the use of state trust companies as custodians for client and regulated fund cryptoassets.
The public comment period will remain open for 60 days following the publication of the SEC’s proposing release in the Federal Register.
James Delaney, managing director, Asset Management Regulation at the Alternative Investment Management Association, believes the latest proposals “marks meaningful progress”.
“AIMA has been calling for greater clarity and more workable custody rules for some time, and it is encouraging to see several of our recommendations reflected in the proposal,” he explains.
“Opening new routes for safeguarded self-custody and custody through state trust companies could help remove some of the practical barriers investment advisers face, while retaining important safeguards for investors.
“There is still plenty to work through, and we will be testing the details to help ensure the final framework strikes the right balance between protecting investors and giving investment advisers the flexibility they need to put their investment strategies into practice.”
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