Last night, the SEC nudged the custody rules forward—not as a slogan, but as a formal proposal.
Oct 1, the SEC proposed revisions to the investment adviser/registered fund custody rules, and separately set up a crypto custody framework (Release IA-7023 / IC-36353). In Atkins’ own words: existing custody rules only cover traditional assets, and advisors and funds have been guessing in a gray area about holding digital assets.
First record these two sharp points:
1️⃣ Conditional self-custody: Advisors/funds may only hold clients’ crypto assets themselves if they determine that “no qualified custodian is willing or able to accept it”; they also must have relevant expertise, cybersecurity measures, annual reviews, internal reporting, and provide client statements and disclosures. This is not a green light for everyone to hold private keys themselves—it’s an exit when custody capacity can’t keep up in the early days of a new coin’s launch.
2️⃣ State chartered trust companies may be added to the list of eligible custodians (with conditions). Reports from CoinDesk and others also mention a 60-day public comment period.
Note: the proposal ≠ approval/implementation. The 2023 version was criticized as “requiring eligible custody while also implying that almost no one can prove exclusive control.” By Uyeda’s account, this version aims to provide a compliant pathway that can actually be followed. This is not the same thing as expanding off-exchange settlement capacity between BitGo and OKX; and don’t read it as bullish for any particular chain or any $BTC spot ETF.
Source: SEC Atkins/Uyeda Oct 1 statement; CoinDesk Oct 1.
Not investment advice.