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SEC Crypto Custody Rewrite Enters White House Review

by admin

The planned rule would cover advisers and investment companies and clarify digital-asset custody, following the withdrawal of a separate 2023 proposal.

The Securities and Exchange Commission’s proposed rewrite of custody rules for investment advisers and investment companies entered White House review on Aug. 25, placing a new crypto-focused framework into regulatory review after the agency withdrew a separate 2023 safeguarding proposal.

The SEC’s 2026 regulatory agenda says the planned rule would clarify how investment advisers and investment companies can custody crypto assets under Commission requirements. The current adviser rule covers client funds and securities and generally requires a qualified custodian to maintain them in separate client accounts or accounts held by an adviser as agent or trustee.

The new agenda covers both investment adviser client assets and investment-company fund assets, and says the SEC intends to remove burdens from provisions it considers outdated. The separate 2023 proposal focused on registered investment advisers, would have expanded the custody rule to all client assets and proposed additional protections involving segregation and custodian insolvency.

OIRA’s current-review data lists RIN 3235-AN46, “Amendments to the Custody Rules,” at the proposed-rule stage with an Aug. 25 date. The SEC agenda identifies the same RIN as an SEC action under the Investment Advisers Act and Investment Company Act.

Public Text Is Not Yet Available

The OIRA entry and SEC agenda provide no proposed rule text. A 2025 White House order says agencies must continue following Executive Order 12866 processes for submitting regulations to OIRA for review. For this SEC action, the public records currently show the review entry and the agenda description, not the draft’s provisions.

The agenda says advisers and investment companies have raised questions about holding crypto assets in compliance with current custody requirements. It does not specify which entities would qualify to custody crypto, what controls would apply or which existing provisions the SEC would remove.

The earlier safeguarding proposal, issued in February 2023 under a different regulatory identifier, would have retained qualified custodians while broadening the adviser rule beyond funds and securities to all client assets, including crypto. It also proposed protections intended to segregate client assets and protect them if a custodian became insolvent, alongside updated recordkeeping requirements.

The Commission formally withdrew that proposal in June 2025 and said any future regulatory action in the area would require a new proposed rule. The current agenda targets October 2026 for a notice of proposed rulemaking and lists no legal deadline.

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