SEC proposes framework allowing investment advisers, funds to self-custody crypto - The Block

The U.S. Securities and Exchange Commission has proposed a framework that would allow registered investment advisers and funds to self-custody crypto assets, according to The Block. The proposal addresses a long-standing structural question: whether regulated entities may hold digital assets directly rather than through a qualified third-party custodian.

For the crypto market, the significance lies in custody, not price. Custody rules shape which institutions can participate and how. If adopted, the framework could reduce reliance on a small pool of intermediaries and give advisers more operational flexibility when managing client crypto exposure. It may also influence how existing custody arrangements are reviewed under current rules.

The proposal is not final, so the practical effect remains uncertain. Key details still to watch include the specific safeguards, such as key management, segregation, and disclosure standards, that firms would need to meet, and how the comment period and any subsequent revisions shape the final rule. Until then, the framework should be read as a potential shift in regulatory posture rather than an immediate change in how crypto is held or traded.