The US securities regulator has proposed easing the rules governing how investment advisers and funds hold crypto, potentially clearing a hurdle that has kept some businesses from offering clients digital-asset investments, according to Cointelegraph. The proposal, published Thursday, would let advisers hold clients' crypto themselves when no eligible custodian is available, subject to conditions, and would allow state trust companies to serve as crypto custodians. "The crypto asset market has grown from a niche curiosity into a multi-trillion-dollar asset class to which investors actively seek exposure. Unfortunately, our rules and regulations have not kept pace," SEC Chair Paul Atkins said in a statement. The measure targets a practical barrier: advisers can struggle to find a qualified custodian for a given token, limiting what they can offer. The Digital Chamber told the SEC in a May 2025 submission that some advisers had declined token allocations or asked portfolio companies to hold them until custody became available. Commissioner Hester Peirce likened the uncertainty to a regulatory "roller coaster," saying advisers had been "gritting their teeth and holding on for dear life" while awaiting workable rules.

Under the proposal, advisers seeking to self-custody would have to establish that no permitted custodian is available for each asset, reassess quarterly, and transfer the assets as soon as reasonably practicable if one becomes available. Self-custody would require safeguards around private keys, cybersecurity and separation of each client's holdings, with at least two authorized individuals approving any transfer. Commissioner Mark Uyeda said the proposal recognized that adviser custody creates "an inherent conflict of interest," and that advisers' fiduciary duties would still apply when holding clients' crypto. Regulated funds would also be allowed to self-custody crypto with their adviser, provided the adviser meets the requirements and the fund's board oversees the arrangement.

Using a state trust company — a firm authorized by a US state to safekeep assets for others — would carry separate conditions, including that it is authorized by the relevant state to provide crypto custody, has reasonable procedures to protect assets from loss, theft or misappropriation, maintains audited financial statements and internal-control reports, and segregates client holdings from its own. The package also proposes changes to audit, recordkeeping and disclosure requirements, with public comments accepted for 60 days after publication in the Federal Register. The proposal adds to a push by the SEC and the Commodity Futures Trading Commission to set clearer crypto rules under existing powers after the CLARITY Act failed to advance in the Senate last month; the CFTC has submitted a crypto-market proposal for White House review, while the SEC has opened a path for trading tokenized stocks.