The Securities and Exchange Commission has proposed a 760-page framework for how investment advisers and regulated funds can hold crypto assets, opening a 60-day comment period on Thursday.
The proposal would let state-chartered trust companies act as custodians for client and fund crypto, and adds record-keeping, disclosure and auditing requirements. It is aimed at asset managers and hedge funds that want to own bitcoin and other tokens directly rather than through an exchange-traded fund.
The most contested piece is self-custody. Advisers could hold assets themselves when no qualified custodian is available, provided they recheck availability every quarter and can show the expertise to do it safely.
An SEC official told CoinDesk that situation would likely be unusual, perhaps applying to a newly launched token.
Chairman Paul Atkins said the agency’s rules had not kept pace with what is now a multi-trillion-dollar asset class, and promised more proposals to come.
It was also the final action for Commissioner Hester Peirce, who led the agency’s crypto task force and whose last day is 2 October. She argued that regulators should zealously protect investors’ right to self-custody rather than push them towards someone else.
The timing says something about where crypto policy is now being made. With the Clarity Act stalled in the Senate, the SEC and the CFTC are writing the rules themselves, and the commission recently lowered its quorum to two members so it can keep doing so.
What the proposal cannot settle is how long it lasts. A rule finalised by a two-member commission can be reopened by the next one, and fund managers weighing direct custody will be pricing that risk alongside the custody fees.
