SEC Proposes Revised Rules for Crypto Asset Custody
The Securities and Exchange Commission (SEC) has proposed revisions to its registration and record-keeping rules for digital assets, marking a significant shift in its approach. The revised proposal, submitted in August 2026, aims to clarify the framework for crypto asset custody for investment advisers and companies.
Building on previous efforts, including the issuance of guidance for controlling crypto asset securities in 2025, the SEC seeks to create a more accommodating environment for digital asset service providers. The A-C-T framework focuses on advancing regulatory environments, which is expected to improve the commercial viability of Bitcoin custodianship for banks.
Under the revised proposal, state-chartered trust companies qualify as 'banks' for custody purposes, provided they meet specific conditions. These entities must maintain audited financial statements prepared in accordance with GAAP, implement internal controls, and adhere to written policies for asset safeguarding.
The SEC Division of Investment Management Staff issued a no-action letter on September 30, 2025, providing clarity for registered investment advisers and companies seeking to use state-chartered trust companies as qualified custodians for crypto assets. This guidance allows these firms to use state trust companies if they meet the specified requirements.
The shift towards a flexible framework is expected to open the door for institutional Bitcoin adoption, enabling banks to engage in crypto-asset-related activities more easily. The SEC's rule 15c3-3 mandates possession and control of customer securities, but Bitcoin typically falls outside these specific rules.