SEC Chief Crypto Counsel Outlines Path for Digital Asset Custody Rules
SEC seeks to integrate crypto into regulated markets
The U.S. Securities and Exchange Commission (SEC) is moving forward with new rules to allow investment firms and broker-dealers to safely hold and manage crypto assets. Taylor Lindman, the chief counsel for the agency’s Crypto Task Force, stated that the SEC’s primary goal is to make traditional financial firms feel comfortable using blockchain technology and holding digital assets. Lindman spoke at a CoinDesk Policy & Regulation event in Washington, D.C. He explained that the new regulatory framework aims to help existing securities intermediaries navigate the crypto market without needing special, separate registrations. The agency is working to assimilate current market participants into a world where they can hold and transact with both security tokens and non-security crypto assets.
Key regulatory developments
- The SEC has a custody proposal for investment advisers that is currently under review by the White House’s Office of Management and Budget (OMB).
- A separate custody proposal for broker-dealers is in the pipeline but is not yet under White House review.
- The SEC previously allowed investment advisers to use state-chartered trusts as qualified custodians for crypto assets starting in September 2025.
- The agency issued a staff statement in December to provide interim guidance for broker-dealers handling crypto custody.
Official source: Lindman on integration
“The big picture with this is we're trying to assimilate the existing securities intermediaries and our existing market participants into a world where they feel comfortable utilizing blockchain, even holding crypto assets, transacting crypto assets, and that includes crypto assets that are securities as well as crypto assets that are non-securities,” Lindman said. Lindman characterized the SEC’s work on these issues as “foundation laying.” He noted that while this work is sometimes boring, it is necessary to build a clear regulatory structure. This effort is happening in the absence of broader crypto legislation from Congress.
Shift in regulatory approach
The SEC’s current approach marks a significant change from its previous stance. In 2023, under then-Chair Gary Gensler, the agency proposed custody rules that effectively barred crypto firms from acting as custodians for the securities they oversee. That specific proposal never became final and was dropped when President Donald Trump returned to office and appointed crypto-friendly leadership to the regulator. Lindman highlighted other recent steps the SEC has taken, including a proposed rule to allow crypto offerings and a new exemption to support tokenized securities venues. These moves are part of a broader strategy to provide clarity for firms looking to enter the digital asset space.
What happens next
Once the OMB clears the custody proposal for investment advisers, the SEC will be able to formally propose the rule and open it for public and industry comment. The broker-dealer custody rules remain on the agency’s agenda but have not yet entered the review phase.
Sources
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