SEC Submits Proposal to White House for Revising Crypto Asset Custody Rules
The U.S. Securities and Exchange Commission (SEC) has submitted a proposal to the White House for revising rules governing the custody of crypto-assets by investment advisers and funds. Dated August 25, 2026, the proposal—known as Amendments to the Custody Rules (RIN 3235-AN46)—has entered review by the Office of Information and Regulatory Affairs (OIRA).
The SEC aims to clarify the regulatory framework for crypto-asset custody and modernize certain requirements it deems outdated in light of market and technological evolution. The proposal, classified as economically significant and deregulatory under Executive Order 14192, seeks to alleviate industry burdens by removing redundant rules rather than imposing new ones.
This initiative emerges amid Congressional delays in passing the comprehensive Digital Asset Market Clarity Act (CLARITY). SEC Chair Paul Atkins previously indicated the agency would proceed with its own rules if CLARITY stalled. The SEC plans to publish a Notice of Proposed Rulemaking (NPRM) in October 2026, followed by a standard public comment period.
The move marks a shift from the post-2008 Madoff scandal era, which spurred stricter custody rules, toward a more flexible approach for crypto markets. However, unresolved technical questions, such as the regulatory treatment of private key custody, remain. The proposal balances industry adaptability against potential risks, as reduced oversight could delay the detection of custody issues.
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