The SEC has published proposed rulemaking related to the custody of crypto assets by investment advisers. The most newsworthy aspect of the rules is that investment advisers can retain custody of crypto assets under certain narrow circumstances. In most cases advisers would be required to use qualified custodians, and the rules include the expected expansion to include state chartered trust companies within the scope of qualified custodians, but only for crypto assets.

The timing comes as the DTC readies to launch tokenized securities, which count as crypto assets under the proposed rules and would therefore fall within the scope of these custodial provisions.

These custodial…