Crypto’s Hedge-Fund Ties to Face Sharper Scrutiny Under SEC Plan

Hedge funds, private equity firms and pension funds could have a tougher time working with many crypto firms under a draft proposal from a top US regulator, according to people familiar with the matter.

Rule changes that the US Securities and Exchange Commission plans to propose Wednesday would in effect make it harder for crypto firms to be “qualified custodians” — a designation that allows companies to hold client assets for money managers, said the people who asked not to be identified because the details haven’t yet been released. It’s unclear what specific change the agency may seek to those ...