SEC Proposes Conditional Self-Custody of Crypto Assets for Advisors

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SEC Chair Gary Gensler has indicated that staff are developing a proposal to allow investment advisors to self-custody crypto assets under specific conditions, as part of a broader regulatory initiative that includes updated rules on CFTC oversight, liquidity, and crypto markets. The plan aligns with the August 18 “Crypto Asset Regulation” and an effort to modernize transfer agents. Gensler also urged Congress to advance the CLARITY Act, which failed a Senate procedural vote on September 15 with 49 votes in favor and 50 against.

Odaily Planet Daily reports: U.S. Securities and Exchange Commission (SEC) Chairman Paul Atkins stated that he has requested staff to develop a proposal allowing investment advisers to directly custody cryptocurrency assets of clients and regulated funds under specific conditions, and to consider permitting state trust companies to serve as custodians.

Atkins noted that some crypto assets currently lack qualified third-party custodians. This custody proposal is one component of the SEC’s crypto regulatory framework; the SEC’s revised crypto asset custody rule had previously entered White House review in August.

The framework also includes two other initiatives: the Crypto Assets Regulation proposed on August 18 and the Modernization of Transfer Agent Rules, which address the issuance and transfer of crypto assets. Atkins also urged Congress to advance the CLARITY Act, but the bill failed to move forward on September 15 in a Senate procedural vote, with 49 votes in favor and 50 against. (Bitcoin.com News)

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