SEC Proposes New Crypto Custody Rules for Investment Firms

SEC Moves Forward with Crypto Custody Rule Changes

The U.S. Securities and Exchange Commission (SEC) has sent proposed changes to crypto custody rules for investment advisers and companies to the White House for review. This step is part of the process to update how firms can hold digital assets like Bitcoin and Ethereum for their clients while following federal securities laws.

The proposal was submitted on August 25 to the Office of Information and Regulatory Affairs (OIRA), which is part of the White House Office of Management and Budget. The OIRA will review the proposal before sending it back to the SEC, which may then release it for public comment.

What the Proposal Aims to Do

The SEC’s proposal focuses on updating or creating new rules under the Investment Advisers Act and Investment Company Act. These changes would clarify how investment advisers and funds can safely hold crypto assets for their clients. The SEC stated that the goal is to reduce uncertainty about how firms can comply with existing rules when dealing with digital assets.

The exact details of the proposal are not yet public. The White House office reviewing it can ask for changes before it returns to the SEC. After that, the SEC will decide whether to open the proposal for public feedback.

Key Details About the Proposal

• The SEC submitted the proposal to the White House on August 25, 2026.
• The changes would apply to investment advisers and investment companies under federal securities laws.
• The proposal is not yet public, and the White House can request modifications.
• The SEC aims to clarify how firms can hold crypto assets while complying with its rules.
• The next step is for the SEC to vote on releasing the proposal for public comment.

SEC’s Shift in Approach to Crypto Regulation

Since Paul Atkins became SEC chair in 2025, the agency has moved away from its previous focus on enforcement actions against crypto companies. Instead, it has prioritized creating clearer rules through formal processes. This shift was highlighted when the SEC dismissed several lawsuits against major crypto firms, including Coinbase, in 2025.

Atkins has stated that the SEC should use formal rulemaking rather than enforcement to set policies for the crypto industry. The current proposal is part of this broader effort to provide regulatory clarity.

What Happens Next

The White House Office of Management and Budget will review the proposal and may request changes. Once the proposal returns to the SEC, the agency will vote on whether to release it for public comment. If approved, the public will have an opportunity to provide feedback before any final rules are adopted.

Sources

• Cointelegraph
• Reginfo.gov (SEC regulatory agenda)
• Bloomberg