New SEC crypto rules threaten small advisers, but big firms win
Story summary
The SEC’s modeled $433,833 annual adviser cost subtotal excludes significant technology spending, raising questions about who can offer the fallback. The post New SEC crypto rules threaten small advisers, but big firms win appeared first on CryptoSlate.
📌 Key Highlights & Takeaways
- The SEC’s modeled $433,833 annual adviser cost subtotal excludes significant technology spending, raising questions about who can offer the fallback.
- The post New SEC crypto rules threaten small advisers, but big firms win appeared first on CryptoSlate.
The US Securities and Exchange Commission’s proposed crypto custody fallback could broaden investment choices while making them easier for larger advisers to offer.
The agency’s economic analysis says the expense of safeguarding assets and arranging independent oversight may lead smaller firms to decline to offer the service.
Approved on Oct. 1, the proposal would let advisers hold covered client crypto assets when an eligible custodian is unavailable, subject to safeguards. Table 8 models certain annual costs of $433,833 per adviser using that option.
That estimate includes an independent control report but leaves out some potentially significant technology costs.
For clients, the consequence could be that an asset might become available through an adviser with sufficient custody resources while remaining outside another adviser’s offering.
SEC Commissioner Hester Peirce distinguished adviser “self-custody” from investors holding their own assets . Here, an intermediary would hold clients' key materials, potentially including a non-controlling portion. Clients would still depend on that intermediary’s safeguards.
For ordinary advisory clients, the adviser amendments concern crypto assets that are funds or securities, while the relevant scope for regulated-fund accounts is securities or similar investments.
The largest modeled annual component is the independent internal control report. The SEC puts its average cost at $376,000, alongside $57,833 in recurring internal compliance work.
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Source: CryptoSlate.
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