SEC Chair Atkins: Plans to Establish a Custody Framework for Crypto Assets

Paul Atkins, the Chairman of the U.S. Securities and Exchange Commission (SEC), issued a statement saying that the Commission proposed a measure this week to fill the regulatory gap regarding the custody of cryptocurrency assets by investment advisors and funds, providing a clear custody framework and compliance path for an increasingly demanded asset class by clients.

Atkins stated that the existing custody rules under the Investment Advisers Act of 1940 and the Investment Company Act of 1940 were formed before the advent of the internet, primarily targeting traditional assets and requiring the use of approved custodians. The custody capabilities for new cryptocurrency assets often lag behind the assets' launch by several months. This proposal aims to address this issue while updating the custody rules for advisors and regulated funds that have not been revised for decades to align with current industry practices and feedback.

The statement noted that this proposal is part of the SEC's regulatory framework for cryptocurrency assets. Related work includes stopping the replacement of regulation with enforcement, issuing a no-action letter regarding the pilot program for the tokenization of securities by custodial trust companies by December 2025, publishing a classification description for tokenized securities in January 2026, and subsequent initiatives regarding the securities attributes of cryptocurrency assets, broker registration, Regulation Crypto Assets, and innovative exemptions for trading tokenized NMS stocks. Atkins indicated that more regulatory proposals will be forthcoming.