The Securities and Exchange Commission released a proposed rule governing cryptocurrency custody arrangements for investment advisers and funds, according to CoinDesk. The proposal marks the final action from Commissioner Hester Peirce, who leads the agency's Crypto Task Force and departs this week.
The custody rule addresses how investment advisers and registered funds must safeguard digital assets held on behalf of clients. The SEC's framework establishes requirements for storing and managing cryptocurrency to protect investor holdings from loss or theft.
Peirce has been a vocal advocate for clearer cryptocurrency regulation throughout her tenure. Her departure signals a shift in the SEC's leadership structure as the agency continues developing standards for digital-asset market participants. The new custody rule represents an effort to bring institutional crypto holdings under formalized regulatory oversight.
The proposed rule draws on existing SEC custody standards while adapting them to cryptocurrency's technical characteristics. It addresses wallet management, cold storage protocols, and oversight responsibilities for advisers managing digital assets.
The SEC's custody proposal reflects ongoing efforts to establish infrastructure standards as institutional adoption of digital assets expands. The framework aims to ensure that investment advisers and funds implement safeguards commensurate with the risks posed by cryptocurrency holdings.