Enterprise capital agency Andreessen Horowitz (a16z) is asking the Securities and Change Fee for a sweeping overhaul of how registered funding advisers are anticipated to safeguard digital belongings.
In a formal letter submitted to the SEC’s Crypto Activity Power on April 9, a16z says RIAs ought to be capable of maintain crypto belongings immediately, below particular circumstances and inside well-defined safeguards.
The SEC’s response to the suggestions could outline how far advisers can go in managing crypto with out counting on outdated custodial fashions, with a16z rising as a key trade voice because of its funding publicity and ongoing coverage engagement.
On Thursday, the agency adopted up with a weblog submit outlining 5 core “Crypto Custody Ideas” designed to supply a roadmap for reform whereas preserving investor protections.
We submitted our response to the SEC’s request for details about IA custody. We’re excited to see the SEC take steps in direction of providing steering for crypto. Advisory shoppers deserve for his or her belongings to be safeguarded, so we welcome concrete recommendation from the Fee. pic.twitter.com/UokoxSGREz
— Scott Walker (@rstwalker) April 16, 2025
A16z stated within the letter that it “consider[s] the Fee ought to present new steering to facilitate custody preparations for crypto belongings, even when solely as a short lived measure till it points new guidelines.”
The agency additionally urged the Fee to allow RIAs to self-custody safety tokens (i.e., crypto belongings which are securities) and “make clear that the self-custody of crypto belongings by RIAs wouldn’t battle with the Custody Rule or fiduciary duties.”
RIAs are fiduciaries that handle shopper portfolios and should adhere to strict custody, recordkeeping, and disclosure guidelines below the Funding Advisers Act of 1940.
However these guidelines, a16z argues, have been designed for a really completely different monetary system, one the place belongings don’t include personal keys or on-chain voting rights.
Guidelines of the highway
Within the submission, a16z known as on the Fee to acknowledge that not all crypto belongings are the identical, and never all custody options are equally obtainable.
The agency additionally identified that crypto belongings usually include financial or governance rights, like staking, yield farming, or on-chain voting, that could be inaccessible whereas held in conventional custodial accounts.
“Below this precept, we posit that RIAs ought to choose a third-party crypto custodian… that enables for the RIA to train financial or governance rights,” the agency wrote. “If a 3rd social gathering can’t meet each necessities, an RIA’s switch of an asset to quickly self-custody… shouldn’t be thought of a switch out of custody.”
The agency additionally warned towards “inflexible classifications” like scorching versus chilly wallets, advocating as a substitute for a safety structure that mitigates key dangers like loss, theft, or misuse, whatever the storage methodology.
“Our purpose is to not increase the scope of the Custody Rule past securities,” the agency clarified, however to supply a standards-based method that “lengthen the objectives of the Advisers Act’s Custody Rule—safety, periodic disclosure, and unbiased verification—to the brand new asset class of tokens.”
The letter landed only a day after the then-Appearing SEC Chair Mark Uyeda stated the company could revisit its $100 million threshold for RIA registration.
Uyeda, talking at a securities regulation convention, additionally stated he had requested SEC employees to judge whether or not the edge “stays acceptable” and hinted that upcoming reforms may scale back burdens for smaller corporations.
Although newly confirmed Chair Paul Atkins has since changed Uyeda, his remarks are seen as a sign that regulatory recalibration stays a dwell dialogue on the Fee.
Edited by Sebastian Sinclair
