SEC Proposes Crypto Custody Rule Amendments Amid Growing Institutional Demand
The Securities and Exchange Commission (SEC) has reopened a long-standing issue in the crypto industry by proposing amendments to its Custody Rule. The rule, which governs how investment advisers and companies hold digital assets for clients, was written before cryptocurrencies existed.
The SEC submitted the proposed amendments to the Office of Information and Regulatory Affairs on August 25, 2026, marking a significant step towards clarifying crypto custody standards. The proposal will be reviewed as an economically significant regulation, which means SEC Commissioners cannot vote on it or discuss its contents until the review is complete.
The expected publication date for the proposed rulemaking is October 2026, which will trigger a minimum 60-day public comment window. However, even after publication, further analysis and a second commission vote are required before compliance becomes mandatory, potentially taking several years.