Crypto Events
By MikeT
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The Problem: Outdated Rules and Limited Flexibility. The existing regulations for crypto custody require advisers to use third-party custodians, such…
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A16z's Five-Principle Framework. In response to the SEC’s request for feedback on crypto custody, A16z has proposed a…
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Why This Matters. A16z’s proposal could help streamline the process for investment firms looking to work with crypto…
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What’s Next?. While the SEC has not yet responded to A16z’s proposal, the firm’s call for reform is part of a…
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Andreessen Horowitz (A16z), a major venture capital firm in Silicon Valley, is calling on the U.S.
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The current custody rules, which were designed for traditional assets like stocks and bonds, do not fit the unique characteristics of digital assets such as cryptocurrencies and…
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The existing regulations for crypto custody require advisers to use third-party custodians, such as banks or trust companies, to manage client assets.
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According to Scott Walker, Chief Compliance Officer at A16z, the current rules force advisers to choose between legal compliance and fully serving their clients.
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In response to the SEC’s request for feedback on crypto custody, A16z has proposed a five-principle framework aimed at modernizing regulations while ensuring investor protection.
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Eligibility Based on Protections, Not Legal Status A16z believes the SEC should evaluate custodians based on their ability to meet high standards for security, rather than…
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Real Safeguards for Custodians Custodians should have the tools to fully secure assets without limiting access to important crypto features, such as staking or governance.
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Allow Advisers to Exercise Crypto Rights If a custodian cannot support certain features, such as staking, RIAs should be allowed to temporarily self-custody assets.
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Best Execution Flexibility A16z advocates for allowing RIAs to transfer assets to trading platforms for the best possible pricing.
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Self-Custody as a Last Resort While third-party custody should remain the default, A16z believes RIAs should be able to self-custody assets when there are no viable alternatives.
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The framework also reflects the growing importance of crypto in the financial world, where blockchain-based assets offer unique opportunities for staking, voting, and yield…
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