SEC Proposes Overhaul of Crypto Custody Rules Amid CLARITY Bill Stalemate

The US Securities and Exchange Commission (SEC) has taken a significant step towards rewriting the rules for crypto custody. The agency has sent proposed changes to the White House Office of Management and Budget for review, which aims to clarify how investment advisers and funds can hold crypto assets for clients under federal law.

The proposal was sparked by questions from investment advisers about how to hold crypto while staying within existing rules. According to SEC Chair Paul Atkins, the agency has shifted away from enforcement towards formal rulemaking since he took over in 2025.

The custody rule overhaul comes as the CLARITY market structure bill remains stalled in the Senate. The proposal is part of the SEC's broader effort to advance the Trump administration's digital asset agenda while legislation moves slowly through Congress.