Galaxy stated that many Registered Investment Advisors (RIAs) have difficulty responding to clients' needs to allocate funds to DeFi while meeting the compliance requirements of the US SEC custody rules. The current rules require clients' assets to be stored in qualified custody institutions, excluding self custody paths, making it difficult for traditional financial accounts to directly participate in DeFi strategies. Galaxy believes that the future solution path is to establish a principle oriented regulatory framework, including MPC key management, governance control, third-party auditing, on chain transparency, and strict protocol due diligence mechanisms.
