SEC Cryptocurrency Custody Proposal Plans to Require Investment Advisers to Specify Bankruptcy Protection Clauses

Techub News reports that @EleanorTerrett tweeted that the bankruptcy protection clause in the SEC's proposal regarding investment advisers self-custodying cryptocurrencies is notable. The proposal requires registered investment advisers (RIAs) to enter into a written agreement with their clients, specifying that under Article 8 of the Uniform Commercial Code, the crypto assets self-custodied by the advisers will be considered financial assets. This move aims to reduce the risk of client asset loss in the event of adviser bankruptcy, which is also an issue the CLARITY Act once sought to address.