TLDR
- SEC Chair Paul Atkins asked staff to draft a proposal letting investment advisers self-custody crypto assets under certain conditions.
- State trust companies could also qualify to hold crypto assets for advisers and regulated funds.
- The custody plan is one of three pillars in the SEC’s broader crypto framework.
- The Senate failed to advance the CLARITY Act on September 15 after a 49-50 procedural vote.
- Atkins says the SEC will keep moving on crypto rules regardless of what Congress does.
Securities and Exchange Commission Chair Paul Atkins wants to give investment advisers a clearer way to hold crypto assets directly for their clients. He shared the plan on September 14 during a speech at the Solana Policy Institute Summit.
Atkins said he has asked SEC staff to draft a proposal on the issue. The proposal would look at whether advisers can custody crypto assets themselves, including assets tied to regulated funds.
“As to self-custody, yes, because for too many assets a qualified third-party custodian simply does not exist yet,” Atkins said.
The plan would also decide whether state trust companies can act as custodians for these assets. This has been a debated topic in past custody discussions.
What Self-Custody Would Mean For Advisers
Right now, advisers often need to place client assets with an outside qualified custodian. Self-custody would let an adviser hold and manage the assets directly instead.
This matters because many crypto assets do not have a qualified third-party custodian available. The SEC’s custody rewrite already entered White House review back in August.
The custody proposal is one part of a larger plan. Atkins described it as one of three pillars in the agency’s crypto framework.
The second pillar is Regulation Crypto Assets, proposed on August 18. It would create rules for certain crypto investment contract offerings.
That plan includes exemptions for smaller offerings. Companies could raise up to $5 million over four years, or as much as $75 million each year, if they meet disclosure rules.
It also includes a safe harbor from the legal definition of a security for certain investment contracts. Atkins said a key open question is when a covered investment contract stops being one.
Transfer-Agent Rules Round Out The Framework
The third pillar involves updating transfer-agent rules. Many of these rules have not changed since the late 1970s and early 1980s.
The update would cover electronic communications, recordkeeping, blockchain technology, and how securities are offered and transferred.
Atkins also urged Congress to pass the CLARITY Act. He said the bill could help answer when a crypto investment contract legally ends.
He added that the SEC will continue its own rulemaking no matter what happens with the bill in Congress.
That legislation hit a roadblock on September 15. The Senate failed to advance the CLARITY Act after a cloture vote came up short, 49 to 50.
The bill, H.R. 3633, remains stalled. Lawmakers have not resolved disputes over ethics provisions and stablecoin rules.
For now, the SEC’s custody proposal, Regulation Crypto Assets, and the transfer-agent update continue to move forward as separate agency actions.
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