A16z Calls on SEC to Update Crypto Custody Rules for Registered Investment Advisers

Daring capital company Andreessen Horowitz (A16Z) asks the Securities and Exchange Commission for a radical overhaul of how registered investment advisers are expected to protect digital assets.

In one formal letter Submitted to the SECs Crypto Task Force on 9 April, says A16Z that RIAS should be able to keep crypto assets directly, under specific conditions and guarantees within well-defined guarantees.

The answer from the SEC to the recommendations can determine how far advisors can go in managing crypto without trusting outdated guardianship models, whereby A16Z pops up as an important voice of industry because of the investment exposure and the continuous policy relief.

On Thursday, the company followed one Blog post Outlines five core “Cryptody Custody Principles” that are designed to offer a route map for reform while retaining investor protection.

A16Z said in the letter that it “believes”[s] The committee must offer new guidelines to facilitate the retention schemes for Crypto assets, even if only as a temporary measure until it takes new rules. “

The company also forced the committee to allow RIAS to confidently self-confidence (ie crypto-assets that are effects) and “clarify that the self-herb of crypto-assets would not be contrary to the retention rule or fiduciary duties.”

RIAS are Fiduciaires who manage customer portfolios and must adhere to strict guardianship, file and disclosure rules under the 1940 Investment Advisers.

But those rules, A16Z argues, are designed for a completely different financial system, a true assets are not supplied with private keys or voting rights on the chain.

Roads

In the entry, A16Z called on the committee to acknowledge that not all crypto assets are the same and not all custody solutions are equally available.

The company also pointed out that crypto assets often come with economic or administrative rights, such as stake” Agricultural yieldOr voting for the chain, that can be inaccessible while being held in traditional custody accounts.

“According to this principle, we state that RIAS must select an external crypto-keeper … that allows the RIA to exercise economic or administrative rights,” the company wrote. “If a third party cannot meet both requirements, an Ria’s transfer of an active temporary self -confident … should not be considered as a transfer from detention.”

The company also warned against “rigid classifications” such as Hot versus cold portfoliosInstead, a security architecture arises that reduces important risks such as loss, theft or abuse, regardless of the storage method.

“Our goal is not to expand the scope of the custody rule outside the effects,” the company clarified, but to offer a standards-based approach that “extends the goals of the guardianship line of the Advisor Act, periodic disclosure and independent verification-to-have from Tokens.”

The letter only landed one day after the then-working SEC seat Mark Uyeda Said that the agency can again visit its $ 100 million threshold for RIA registration.

Uyeda, speaks of effects law conferenceAlso said that he had asked SEC -employees to evaluate whether the threshold remains “appropriate” and hinted that upcoming reforms could reduce the burden for smaller companies.

Although newly confirmed chair Paul Atkins Since then Uyeda has been replaced, his comments are seen as a signal that the regulations of the regulations remain a live discussion with the committee.

Published by Sebastian Sinclair