Why A16Z Is Urging the SEC to Rethink Crypto Custody Rules?

Crypto custody services, tasked with safeguarding $2.7 trillion in digital assets, face numerous challenges. These services must secure blockchain-based tokens while navigating risks like hacks and complex features like staking and protocol voting. However, U.S. Securities and Exchange Commission (SEC) regulations, rooted in traditional finance, often clash with the realities of the crypto world. Venture capital firm Andreessen Horowitz (a16z) submitted a detailed response to the SEC’s request for information on investment custody, advocating for a principles-based framework for Registered Investment Advisers (RIAs). A16z’s proposal, made on April 17, 2025, highlights that current custody rules, last updated in 2009, were built for stocks and bonds, not digital assets.