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 let registered investment advisers and funds hold crypto assets in self-custody, according to The Block. In practice, that means qualifying firms could custody digital assets directly rather than routing them exclusively through a third-party custodian.

The proposal matters because custody has been one of the main structural barriers keeping regulated advisers and pooled funds on the sidelines of crypto. Self-custody could reduce reliance on a small set of intermediaries and lower operational costs, but it also shifts responsibility for key management, cybersecurity, and compliance squarely onto the firm. Those obligations are not trivial, and examiners are likely to scrutinize how safeguards are designed and documented.

Importantly, this is a proposal, not a final rule. The details that will shape market relevance — which entities qualify, what controls are required, and how existing custody rules interact with the framework — still have to be settled through the public comment process. Until then, the practical effect on advisers and fund structures remains uncertain.