Venture capital firm Andreessen Horowitz (a16z) is asking the Securities and Exchange Commission for a sweeping overhaul of how registered investment advisers are expected to safeguard digital assets.
In a formal letter submitted to the SEC’s Crypto Task Force on April 9, a16z says RIAs should be able to hold crypto assets directly, under specific conditions and within well-defined safeguards.
The SEC’s response to the recommendations may define how far advisers can go in managing crypto without relying on outdated custodial models, with a16z emerging as a key industry voice due to its investment exposure and ongoing policy engagement.
On Thursday, the firm followed up with a blog post outlining five core “Crypto Custody Principles” designed to offer a roadmap for reform while preserving investor protections.
A16z said in the letter that it “believe[s] the Commission should provide new guidance to facilitate custody arrangements for crypto assets, even if only as a temporary measure until it issues new rules.”
The firm also urged the Commission to permit RIAs to self-custody security tokens (i.e., crypto assets that are securities) and “clarify that the self-custody of crypto assets by RIAs would not conflict with the Custody Rule or fiduciary duties.”
RIAs are fiduciaries that manage client portfolios and must adhere to strict custody, recordkeeping, and disclosure rules under the Investment Advisers Act of 1940.
But those rules, a16z argues, were designed for a very different financial system, one where assets don’t come with private keys or on-chain voting rights.
Rules of the road
In the submission, a16z called on the Commission to acknowledge that not all crypto assets are the same, and not all custody solutions are equally available.
The firm also pointed out that crypto assets often come with economic or governance rights, like staking, yield farming, or on-chain voting, that may be inaccessible while held in traditional custodial accounts.
“Under this principle, we posit that RIAs should select a third-party crypto custodian… that allows for the RIA to exercise economic or governance rights,” the firm wrote. “If a third party can’t meet both requirements, an RIA’s transfer of an asset to temporarily self-custody… shouldn’t be considered a transfer out of custody.”
The firm also warned against “rigid classifications” like hot versus cold wallets, advocating instead for a security architecture that mitigates key risks like loss, theft, or misuse, regardless of the storage method.
“Our aim is not to expand the scope of the Custody Rule beyond securities,” the firm clarified, but to offer a standards-based approach that “extend the goals of the Advisers Act’s Custody Rule—security, periodic disclosure, and independent verification—to the new asset class of tokens.”
The letter landed just a day after the then-Acting SEC Chair Mark Uyeda said the agency may revisit its $100 million threshold for RIA registration.
Uyeda, speaking at a securities law conference, also said he had asked SEC staff to evaluate whether the threshold “remains appropriate” and hinted that upcoming reforms could reduce burdens for smaller firms.
Though newly confirmed Chair Paul Atkins has since replaced Uyeda, his remarks are seen as a signal that regulatory recalibration remains a live discussion at the Commission.
Edited by Sebastian Sinclair
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