SEC proposes rule to define custody and disclosure requirements for crypto assets

The U.S. Securities and Exchange Commission on Thursday proposed a new rule aimed at clarifying how investment advisers and regulated funds may hold and safeguard client crypto assets. The proposal would also set requirements for recordkeeping, federal disclosures, industry operations, and audits tied to those holdings. SEC Chair Paul Atkins said the current custody framework was built mainly for traditional assets, and that the new proposal is intended to establish a regulatory structure for crypto asset custody. The agency has opened a 60-day public comment period on the proposal. Under certain conditions, the rule would also allow self-custody of crypto assets and permit the use of state-chartered trust institutions as custodians. The proposal marks a fresh step by the SEC to spell out how existing oversight standards could apply to digital asset custody arrangements involving advisers and regulated funds.