SEC Proposes Framework for Crypto Custody by Registered Advisers
The Securities and Exchange Commission (SEC) has proposed new rules to address the custody of cryptocurrency assets by registered investment advisers and regulated funds. The proposal, announced on October 1, 2026, aims to provide a compliant pathway for these entities to hold crypto assets under federal securities laws.
According to SEC Chairman Paul Atkins, many areas of the existing custody rules predate the internet and were designed around traditional assets. He argued that custodial capabilities for newly developed crypto assets can lag behind their deployment by months, creating compliance difficulties.
The proposed framework would permit certain self-custody arrangements, where advisers hold client assets themselves under limited conditions. It would also allow state trust companies to serve as custodians for client and fund crypto assets under specified conditions.
SEC Commissioner Hester Peirce clarified that 'self-custody' in this context refers to advisers acting as custodians for client assets, not investors directly controlling their own private keys. The proposal would also update broader custody requirements, including financial statement audits and broker-dealer custodial services.