SEC Proposes Letting Advisers and Funds Hold Client Crypto Without a Custodian

The proposal targets a structural bottleneck rather than a single firm: custody has been the practical gatekeeper for advisers and funds seeking crypto exposure, and loosening it when no qualified custodian is available could widen participation. State trust companies gaining eligibility matters because it redistributes the custodian role beyond a small set of federally regulated players, though the reliance on a fallback when no qualified custodian exists leaves the threshold ambiguous. Whether the 60-day comment period narrows or expands that fallback is the open question.