Self-Custody Proposal Would Require RIAs to Clarify Crypto Bankruptcy Protection

This targets a legal grey zone that has quietly shaped crypto custody risk: whether client assets held by an adviser qualify as financial assets under Article 8, which determines if they are protected from the adviser's estate in insolvency. RIAs offering self-custody have often relied on disclosure language rather than explicit contractual clarity, leaving clients exposed in a failure. The significance is procedural rather than market-moving — it shifts the burden onto written client agreements. Whether the proposal advances, and how advisers with existing self-custody arrangements adapt their documentation, is the open question.