Scott Melker Reports SEC Proposes Direct Crypto Custody for RIAs
Scott Melker reported that the SEC has proposed a compliant route for Registered Investment Advisers (RIAs) to directly hold crypto assets, including a path for institutional self-custody.
Scott Melker, host of The Wolf Of All Streets podcast, reported on Friday via X (formerly Twitter) that the U.S.
The SEC's proposal outlines dedicated custody rules for RIAs, investment funds, and business development companies, aiming to create a compliant framework for direct crypto holdings.
Melker highlighted a particularly interesting aspect of the proposal: “funds and advisers could custody crypto themselves, but only in narrow circumstances.” These circumstances include scenarios where no permitted custodian supports the asset, the adviser possesses documented expertise, transactions require at least two-person authorization, and robust cybersecurity and key management controls are in place.
Scott Melker, host of The Wolf Of All Streets podcast, reported on Friday via X (formerly Twitter) that the U.S. Securities and Exchange Commission (SEC) is proposing new rules for crypto asset custody. Melker stated, “SEC proposes a compliant route for RIAs to hold crypto directly, with a path to institutional self-custody.” He quoted from what appears to be an official SEC press release, noting that the proposal “would address how investment advisers and funds can custody crypto assets under the federal securities laws.”
The SEC's proposal outlines dedicated custody rules for RIAs, investment funds, and business development companies, aiming to create a compliant framework for direct crypto holdings. This development follows recent mixed activity in the digital asset market and ongoing discussions around stablecoin and DeFi policies. The market has also seen Fiserv launch a live stablecoin platform with over 90 banks on Solana, indicating growing institutional interest in digital assets.
Melker highlighted a particularly interesting aspect of the proposal: “funds and advisers could custody crypto themselves, but only in narrow circumstances.” These circumstances include scenarios where no permitted custodian supports the asset, the adviser possesses documented expertise, transactions require at least two-person authorization, and robust cybersecurity and key management controls are in place. This framework suggests the SEC is considering institutional self-custody under strict conditions, potentially offering a new avenue for regulated entities to manage digital assets directly.
“SEC proposes a compliant route for RIAs to hold crypto directly, with a path to institutional self-custody 'We have some fundamentally huge news, and it is this, directly from the United States Securities and Exchange Commission. This looks very official. It's their press release, SEC proposal would address how investment advisers and funds can custody crypto assets under the federal securities laws.' 'This is the SEC proposing dedicated custody rules for registered investment advisers, investment funds and business development companies.' 'This will create a compliant route for advisers and regulated funds to hold crypto directly.' 'What's even more interesting, the SEC went a step further. They said funds and advisers could custody crypto themselves, but only in narrow circumstances.' 'Here are the ways that they could custody themselves on behalf of their clients: no permitted custodian supports the asset, the adviser documents the necessary expertise, at least 2 people authorize transactions, cybersecurity and key management controls are reviewed, an independent accountant examines the system, the adviser checks quarterly whether an outside custodian has become available.' 'This is literally institutional self custody. Doesn't mean that you as the client control your private keys, but it is self custody by the RIA on your behalf.'”
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