Key Highlights On Thursday, the SEC introduced a comprehensive proposal establishing custody standards for cryptocurrency assets held by investment advisers and regulated funds. Investment ad
The United States Securities and Exchange Commission unveiled a proposed rule on Thursday designed to establish clear parameters for how investment advisers and regulated funds maintain custody of cryptocurrency assets.
NEW: The @SECGov’s crypto custody proposal for investment advisers and regulated funds has landed.
It includes allowing self-custody in certain cases and state trust companies to serve as custodians. https://t.co/ItqgE9zOVo
— Eleanor Terrett (@EleanorTerrett) October 1, 2026
According to SEC Chairman Paul Atkins, existing custody regulations were designed for a bygone financial landscape. He emphasized that these frameworks addressed only conventional assets, leaving financial firms without proper direction for digital holdings.
The comprehensive proposal spans 760 pages, establishing detailed requirements for authorized custodians of client crypto assets and mandatory record-keeping protocols.
The proposed framework would authorize advisers to employ self-custody arrangements under particular circumstances. These scenarios would primarily emerge when qualified custodians decline or cannot accommodate specific digital assets.
According to an SEC representative, such situations should occur infrequently. A cited scenario involved recently introduced tokens that existing custodians haven’t integrated into their service offerings.
Investment firms opting for self-custody arrangements would require demonstrated competency in secure asset management. Additionally, quarterly assessments would be mandatory to determine whether qualified custodian services have become accessible.
The regulatory framework would additionally authorize state-chartered trust institutions to function as qualified custodians, expanding available options for advisers and investment funds beyond federally-regulated custodians.
Commissioner Hester Peirce offered clarification regarding the “self-custody” terminology. She explained it pertains to advisers maintaining client assets, distinguishing this from individuals personally controlling their cryptocurrency holdings.
“True self-custody is not the right choice for everyone, but many crypto owners prize being able to custody their own assets,” Peirce said in a statement.
The regulatory proposal emerges one day prior to Peirce’s final day with the commission. Since its establishment, she has directed the SEC’s Crypto Task Force and will transition to an academic position in Virginia.
Her exit reduces the SEC to two sitting commissioners. Earlier this week, the commission adjusted quorum requirements downward from three commissioners to two.
The custody proposal enters a 60-day public commentary phase. Following this period, the SEC will determine whether to adopt the rule in final form.
This initiative follows additional recent SEC actions regarding cryptocurrency regulation. The commission previously released its Innovation Exemption covering securities tokenization and introduced a separate framework titled Regulation Crypto Asset addressing digital fundraising activities.
Following the Senate’s rejection of the Clarity Act, both the SEC and Commodity Futures Trading Commission have advanced cryptocurrency regulatory initiatives. The CFTC has submitted its cryptocurrency rulemaking agenda to the White House.
Atkins indicated additional proposals are forthcoming. He stated the commission remains committed to establishing the United States as a leading jurisdiction for cryptocurrency innovation.
This custody framework represents completion of all principal items from the cryptocurrency regulatory roadmap Atkins outlined earlier this year.
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