SEC Submits Crypto Custody Rule Proposal to White House Review

The U.S. Securities and Exchange Commission (SEC) has taken a significant step towards clarifying how investment advisers and funds handle client custody rules, potentially including guidance for crypto asset custody. The agency's proposal was submitted on August 25 to the Office of Information and Regulatory Affairs (OIRA), where it will undergo review by the White House Office of Management and Budget.

The SEC's regulatory agenda indicates that the rules are intended 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 the intent is to clarify compliance expectations and reduce uncertainty currently affecting institutional crypto custody.

The proposal, which has not yet been published publicly, would address custody practices for investment advisers and funds, including how those entities may custody crypto assets for clients. The SEC's shift towards rulemaking under current leadership aligns with the agency's direction to create clearer standards that regulated firms can plan around.