Andreessen Horowitz Pushes SEC to Modernize Crypto Custody Rules for RIAs

Venture capital giant Andreessen Horowitz (a16z) is calling on the U.S. Securities and Exchange Commission (SEC) to modernize regulations for how Registered Investment Advisers (RIAs) safeguard digital assets. In a formal letter submitted to the SEC’s Crypto Task Force on April 9, the firm urged the Commission to allow RIAs to self-custody crypto assets, including security tokens, under specific conditions and with proper safeguards.

According to a16z, existing custody regulations under the Investment Advisers Act of 1940 are outdated and incompatible with the technical realities of blockchain, such as private key management and on-chain governance. The firm emphasized that crypto custody solutions should reflect the unique economic and governance rights tied to these assets, such as staking and yield farming—features often inaccessible through traditional custodians.

In a follow-up blog post, a16z introduced five “Crypto Custody Principles,” outlining a framework to enhance investor protections while promoting innovation. The firm argued against rigid classifications like hot vs. cold wallets, instead proposing a risk-based approach focused on security, transparency, and independent verification.

The firm clarified that it does not aim to expand the Custody Rule’s scope beyond securities but wants a standards-based update that aligns with the unique features of digital assets. a16z also urged the SEC to offer interim guidance until formal rules are implemented.

This appeal coincides with broader regulatory discussions, including recent comments from former Acting SEC Chair Mark Uyeda about revisiting the $100 million RIA registration threshold. With Paul Atkins now serving as Chair, regulatory reform remains an active topic—one that a16z hopes will prioritize crypto-native solutions and empower U.S.-based digital asset managers.