Crypto custody services, safeguarding over $2.7 trillion in digital assets, face challenges from outdated regulations. Venture capital powerhouse A16z has urged the US Securities and Exchange Commission (SEC) to revamp its rules on investment custody for crypto. 40% of RIAs struggle with limited custodial options according to a 2023 Bitwise survey, prompting A16Z’s detailed proposal for a principles-based framework for Registered Investment Advisers (RIAs). A16z calls for flexibility in best execution, allowing RIAs to access crypto rights like staking and governance without regulatory barriers. 5 key principles outlined in their proposal include: focusing on security protections over custodian status; requiring clear asset ownership records, blocking unauthorized transfers, and ensuring secure custody practices. A16Z’s proposal seeks to ease the burden on RIAs managing trillions in assets while maintaining robust safety standards for clients.