The Securities and Exchange Commission has proposed changes to how crypto assets can be custodied in the wake of Congress’s failure last month to pass digital asset legislation.

Notably, the proposed changes the SEC unveiled on Thursday would allow RIAs to self-custody clients’ crypto assets under certain conditions.

The proposals garnered a range of reactions; one advisor advocacy group lauded the “positive framework” for crypto custody proposed by the rule, while an investor protection group said the proposal “subjects investors to the very high risk of loss the SEC exists to prevent.”

Under the rule, advisors must typically custody client assets with a regulated qualified custodian, which can range from the largest financial…