TechFlow reports, July 2, Galaxy stated in a post on the X platform that many Registered Investment Advisors (RIAs) struggle to meet client demands for allocating funds to DeFi while complying with the U.S. SEC Custody Rule. The main pain point lies in the current rule requiring client assets to be held with qualified custodians, effectively excluding self-custody paths, making it difficult for traditional finance accounts to directly participate in DeFi strategies.
Galaxy believes that a possible future solution is to establish a principles-based regulatory framework, including MPC key management, governance controls, third-party audits, on-chain transparency, and strict protocol due diligence mechanisms, to unlock on-chain asset allocation capabilities without undermining regulatory objectives.
