SEC Proposes New Crypto Custody Rules for Regulated Funds Following CLARITY Act Gridlock

The US Securities and Exchange Commission has proposed new rules to establish a clearer framework for how registered investment advisers and regulated funds custody crypto assets. The proposal removes existing regulatory barriers by allowing digital assets to be held through state trust companies or specific self-custody arrangements. This regulatory initiative follows the failure of the CLARITY Act to advance in Congress, shifting the industry's focus toward what US regulators can accomplish using their existing authority. The SEC's proposed changes are not final, and a 60-day public comment period is now open before the agency makes a definitive ruling. "It is another element of a comprehensive crypto asset regulatory approach. It began with ending regulation by enforcement." — SEC Chairman Paul S. Atkins.