The SEC proposed a new regulatory framework permitting registered investment advisers and funds to self-custody digital assets under certain conditions, and explicitly recognizing state-chartered trust companies as eligible custodians. The proposal represents a significant shift from the regulator's prior posture, which effectively required third-party qualified custodians for all client crypto assets.
For Armada's crypto repo desk, this matters on two fronts. First, fund counterparties may begin migrating custody arrangements away from established custodians like Fireblocks, potentially complicating collateral verification and custody confirmation workflows. Second, if state trust companies gain wider custodian recognition, Armada's current Fireblocks-anchored custody policy may need revisiting to ensure it remains best-in-class and compliant as the rule is finalized.