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What Is the Significance of the SEC’s Custody Rule (Rule 206(4)-2) for Registered Investment Advisers Holding Crypto?

The SEC's Custody Rule requires registered investment advisers (RIAs) to ensure client funds and securities are held by a "qualified custodian." For crypto assets, the application of this rule is complex due to the unique nature of digital assets. The rule is significant as it dictates that RIAs must use custodians who can meet the high standards of segregation and control, driving institutional demand toward regulated and compliant custody solutions.

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