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SEC.gov, Reuters, CoinDesk, The Block and Bloomberg confirm the Oct 1 SEC proposal on crypto custody rules for advisers and funds under Chairman Paul Atkins.

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Home/Markets/SEC Proposes Crypto Custody Rules for Advisers and Funds
VERIFIEDBy Xavier Rivera· ·1.5 min read

SEC Proposes Crypto Custody Rules for Advisers and Funds

The SEC advanced regulations permitting investment advisers and funds to custody crypto assets under defined conditions, establishing a regulatory path following the Clarity Act blockage last month.

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SEC Proposes Crypto Custody Rules for Advisers and Funds
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TL;DRAI · 60 sec read

The Securities and Exchange Commission proposes rules on crypto custody for investment advisers and regulated funds. Self-custody is permitted only when no approved custodian exists. Blockchain records could satisfy compliance requirements under certain conditions, while state trust companies may serve as custodians when applicable. The process continues after blockage of the Clarity Act.

The Securities and Exchange Commission proposed new rules for how investment advisers and regulated funds custody crypto assets.

Proposal permits self-custody only when no permitted custodian exists. Advisers and funds operating via their advisers may retain client crypto directly, but solely in cases where no approved custodian can be located. The measures target revisions to digital asset custody arrangements.
Atkins added he would keep pursuing a goal to position the U.S. as the crypto capital of the world.

Blockchain records may satisfy compliance requirements. Records maintained on a blockchain could fulfill compliance obligations when certain conditions are met. State trust companies could also act as custodians for client and regulated fund crypto holdings, again when conditions apply.
POST FROM @SECGov· official SEC announcement tweet on the crypto custody proposal
https://x.com/SECGov/status/2105750972521705961

Rulemaking continues after Clarity Act blockage. Lawmakers blocked the Clarity Act via procedural vote last month. That measure sought to separate digital assets into categories such as securities, commodities or payment stablecoins. Regulators signaled they would advance crypto oversight irrespective of the vote result.
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Chairman Atkins highlights need for updated framework. SEC Chairman Paul S. Atkins stated that the crypto asset market has grown from a niche curiosity into a multi-trillion-dollar asset class since Bitcoin’s 2008 launch. He noted the proposal supplies a clear regulatory framework for crypto custody, replacing uncertainty from prior rules. Atkins added he would keep pursuing a goal to position the U.S. as the crypto capital of the world.
Records maintained on a blockchain could fulfill compliance obligations when certain conditions are met.
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SEC sent proposal to White House before vote. The commission delivered the custody framework proposal to the White House prior to the Clarity Act vote. The commission had already indicated it would begin regulating the crypto sector regardless of legislative outcomes.

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