SEC proposes crypto custody framework for RIAs and regulated funds

The U.S. Securities and Exchange Commission  that would provide a tailored framework for the custody of crypto assets for registered investment advisers and regulated funds, the agency said Thursday.Regulated funds would include registered investment companies and business development companies, it said.The proposal would expand investor choice by eliminating barriers that restrain the adviser's ability to provide crypto-related investment advice. It would also allow regulated funds to offer clients a wider range of crypto-asset-related investment strategies.SEC Chairman Paul Atkins said the proposal is intended to bring regulation up to date with the development of the crypto industry, which has grown into a multi-trillion-dollar asset class since Bitcoin was launched in 2008."Today’s proposal would provide a clear regulatory framework for the custody of crypto assets, giving investment advisers and funds a compliant pathway where none existed before — and replacing the grey of uncertainty created by custody rules crafted for a bygone era," he said in a statement.The SEC is seeking to amend the Investment Advisers Act of 1940 and the Investment Company Act of 1940 to update a number of requirements relating to, among other things, financial statement audits for registered investment advisers and broker-dealer custodial services for regulated funds.The proposal would allow crypto assets to be held in self-custody under certain circumstances and allow the use of state trust companies as custodians for clients and regulated fund crypto assets, the SEC said.Bitcoin rose 1.5% in the past 24 hours to $84.8K, and Ethereum rose 0.7% to $2.70K.Content provided by Seeking Alpha is intended for information purposes only, and that Seeking Alpha does not offer any personalist investment advice and is not a licensed securities dealer, broker, US investment adviser or investment bank.