SEC Chief Crypto Counsel Outlines Upcoming Custody Rule and Broader Crypto Agenda

SEC chief counsel for the Crypto Task Force, Taylor Lindman, detailed the agency’s near‑term plans for a custody rule that would integrate crypto assets into the existing securities framework.

Custody proposal under White House review

The Securities and Exchange Commission has a draft rule governing how broker‑dealers and investment firms may hold crypto assets. The proposal is currently awaiting clearance from the Office of Management and Budget before it can be formally published for public comment.

Key objectives

• Allow broker‑dealers to hold non‑security crypto assets without requiring a separate registration.
• Clarify where investment advisers may park client assets, including the use of state‑chartered trusts as qualified crypto custodians.

Context and prior efforts

Earlier attempts to adopt a custody rule in 2023 were halted after a change in administration. The previous approach had indicated that crypto firms would not qualify as custodians, but the rule never reached final form.

Broader regulatory work

Lindman noted that the SEC is simultaneously advancing other initiatives, such as a tokenization exemption and a proposed rule to facilitate crypto offerings. He described this work as “foundation laying,” emphasizing the need to bring “boring” but essential rules to market participants.

Goal for the industry

The agency aims to make existing securities intermediaries comfortable using blockchain technology, whether the assets are securities or non‑securities, and to provide a clear regulatory framework for future generations of crypto products.