SEC Moves to Revive Crypto Custody Rule for Investment Advisers Under New Approach
The SEC is working to resurrect a crypto custody rule that its prior administration failed to finalize in 2023, which would have restricted where investment advisers could hold clients' crypto assets. The new effort remains largely undisclosed in its specifics. The rule, if enacted, could affect how advisers handle XRP and other digital assets on behalf of clients.
The U.S. Securities and Exchange Commission is reportedly reviving an effort to establish a formal crypto custody rule for investment advisers, following a failed attempt in 2023. The original proposal sought to narrowly limit the types of custodians investment advisers could use when holding digital assets on behalf of clients.
Details of the new approach remain scarce, with the SEC yet to publicly disclose the specifics of its revised framework. The prior rule was widely seen as restrictive and did not advance to finalization under the previous administration.
A renewed custody rule would have direct implications for institutional participants in the XRP market, as it would govern how regulated investment advisers may hold XRP and other digital assets for clients. Depending on its scope, it could affect the operational structures of firms already active in the space or those considering entry.
The development represents an ongoing area of regulatory uncertainty for the broader crypto market, including XRP. Clarity on custody standards has long been cited by institutional players as a prerequisite for deeper engagement with digital assets.
Key facts
- •The SEC is reviving a crypto custody rule for investment advisers
- •A similar rule was attempted in 2023 but failed to be finalized
- •The 2023 proposal sought to restrict where advisers could park clients' crypto assets
- •The new approach has not been publicly detailed
- •The rule would affect how digital assets including XRP are custodied by advisers