The U.S. Securities and Trade Fee (SEC) just lately proposed overhauling the Custody Rule underneath the Advisers Act to reinforce the safety of buyer belongings managed by registered funding advisers. These enhancements, that are proposed to be embodied in new rule 223-1 underneath the Advisers Act (Proposed Safeguarding Rule), might improve the price burden on crypto custodians and funding advisers – and hurt their shoppers – prompting the necessity to exempt funding advisers from sure elements of the Proposed Safeguarding Rule. We define a number of the impacts of the Proposed Safeguarding Rule in a current shopper alert, linked beneath. Our shopper alert additionally proposes an exemption from the Proposed Safeguarding Rule that offers funding advisers the flexibleness to custody shopper belongings with out a certified custodian till a extra sturdy custody market (significantly with regard to DeFi) develops, whereas additionally safeguarding in opposition to the abuses that the Proposed Safeguarding Rule seeks to stop.
New SEC Proposed Safeguarding Rule: Inadvertent Crypto Casualties
