SEC Crypto Custody Rewrite Enters White House Review

The U.S. Securities and Exchange Commission (SEC) has moved its proposed rewrite of custody rules for investment advisers and investment companies into White House review as of August 25. The rule aims to clarify how digital‑asset custody should be handled under existing securities regulations.

Scope of the Proposed Rule

The SEC’s 2026 regulatory agenda indicates the rule will address both adviser client assets and investment‑company fund assets. It seeks to remove burdens from provisions the agency deems outdated while providing a framework for crypto custody.

Background and Prior Proposal

A separate safeguarding proposal issued in February 2023 targeted registered investment advisers and would have expanded custody requirements to all client assets, including crypto. That proposal included segregation and insolvency protections but was withdrawn in June 2025.

Current Review Status

The Office of Information and Regulatory Affairs (OIRA) lists the action under RIN 3235‑AN46 at the proposed‑rule stage, with no public text released yet. The SEC plans to issue a notice of proposed rulemaking by October 2026.

Implications for the Industry

Advisers and investment companies have raised questions about complying with existing custody rules when holding crypto assets. The forthcoming rule is expected to clarify which entities may act as custodians and what controls are required, though specific details remain undisclosed.