SEC proposes crypto custody rule for investment advisers and funds

The U.S. Securities and Exchange Commission proposed a rule on Thursday to clarify how investment advisers and regulated funds handle and safeguard customer crypto assets. The proposal would clarify recordkeeping, federal disclosure, industry practice and auditing requirements. The proposed rule would allow self-custody of crypto assets under certain circumstances. It would also permit state-chartered trusts to serve as custodians. The proposal is open for a 60-day public comment period. SEC Chairman Paul Atkins said the proposal would give advisers and funds a compliant pathway for crypto custody where none existed before. Atkins said existing custody rules were designed to protect client and fund assets from loss, theft, misuse and misappropriation but addressed only traditional assets.