US SEC intends to establish a dedicated regulatory framework for investment advisers and funds for the self-custody of crypto assets.

According to official announcements, the U.S. Securities and Exchange Commission (SEC) has proposed a new regulatory framework to standardize the custody of crypto assets by investment advisors and regulated funds. The framework is designed to provide a "compliance path" for holding digital assets under a set of rules that were largely established before the internet era. SEC Chair Paul Atkins stated: "Since the launch of Bitcoin in 2008, the crypto asset market has evolved from a niche novelty to a multi-trillion-dollar asset class, with investors actively seeking exposure to it. Unfortunately, our rules and regulation have failed to keep pace with this development." The proposal addresses a key challenge facing institutional investors: that some crypto assets currently may not have qualified custody infrastructure available. It will also allow self-custody of crypto assets under specific circumstances, and permit state-level trust companies to provide custody services for the crypto assets of clients and regulated funds. This is highly significant for asset management firms, hedge funds, and other institutions that wish to hold Bitcoin and other crypto assets directly, rather than gaining exposure through ETFs or other intermediaries. Additionally, the proposal will allow investment advisors to engage in "self-custody" of crypto assets for clients and regulated funds in limited cases, including situations where the advisor determines no qualified custodian is accessible. SEC Commissioner Hester Peirce further clarified that this "self-custody" refers to the investment advisor acting as the custodian of client assets, rather than investors directly controlling their own crypto assets.