The SEC proposed a tailored crypto custody framework on October 1 for registered advisers and regulated funds. The planned rules are intended to remove some obstacles preventing advisers from offering digital asset strategies while maintaining investor protections. Managers would need to establish control over keys, segregate client assets, address lost or compromised keys, value holdings and satisfy external oversight. However, the proposal does not immediately authorize every fund structure or determine which institutions can qualify as custodians. The final requirements could make crypto investments easier to distribute through existing funds and advisory relationships, but could also raise costs or limit the assets institutions are willing to support.
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