SEC Proposes Overhaul of Crypto Custody Rules Amid Institutional Growth
The US Securities and Exchange Commission (SEC) has taken a crucial step towards rewriting custody rules for investment advisers and companies, potentially including clearer guidance for crypto asset custody. The agency's proposal was submitted to the Office of Information and Regulatory Affairs (OIRA) on August 25, where it will undergo review by the White House Office of Management and Budget before returning to the SEC.
The SEC's regulatory agenda indicates that the rules aim to reduce uncertainty over how regulated firms may hold crypto for clients while complying with federal securities requirements tied to the Investment Advisers Act and the Investment Company Act. The agency says it wants to clarify compliance expectations and reduce uncertainty currently affecting institutional crypto custody.
Under the US regulatory process, submissions to OIRA are typically part of the administration's review pipeline, which includes assessing potential economic impacts and other policy considerations. The SEC's agenda framing highlights compliance clarity as the core objective: institutions have needed more predictable standards for how they can custody digital assets while meeting securities-law obligations.
The SEC's shift towards rulemaking under current leadership is reflected in past enforcement posture. Earlier coverage noted that the SEC dismissed several cases against major crypto companies, including its lawsuit against Coinbase, as it moved to reshape its approach to digital assets.