The US Securities and Exchange Commission (SEC) has proposed new rules that could allow investment advisers and regulated funds to self-custody crypto assets under certain conditions. The proposal also says state trust companies could act as crypto custodians for clients and funds. The SEC said the move is meant to clear up rules that were written before the rise of digital assets. Following publication in the Federal Register, the proposal will be available for public comment for 60 days.
Since the advent of Bitcoin in 2008, the crypto asset market has grown from a niche curiosity into a multi-trillion-dollar asset class to which investors actively seek exposure. Unfortunately, our rules and regulations have not kept pace.
To that end, today’s proposal would provide a clear regulatory framework for the custody of crypto assets, giving investment advisers and funds a compliant pathway where none existed before—and replacing the grey of uncertainty created by custody rules crafted for a bygone era.
— Paul Atkins (@SECPaulSAtkins) October 1, 2026
According to SEC Chairman Paul Atkins, the cryptocurrency market has expanded from a tiny, little-known industry to a multitrillion-dollar asset class. However, he said the rules governing the custody of these assets have not kept pace with that growth.
At present, investment advisers are generally expected to keep their clients’ assets with qualified custodians that meet strict safety requirements. But applying these rules to crypto has not always been straightforward. In some cases, advisers may find that there is no suitable custodian that meets the existing requirements.
The new proposal tries to deal with that problem. Under certain conditions, an adviser could hold crypto assets itself instead of handing them over to a third-party custodian. The SEC also wants state-chartered trust companies to be allowed to provide custody services for crypto held by clients and regulated funds.
The word “self-custody” can be slightly confusing in this case. SEC Commissioner Hester Peirce explained that the proposal is mainly about advisers acting as custodians for client assets. It does not mean that individual investors will suddenly be required to change how they hold their personal crypto.
The SEC’s approach in 2023 was different. It had proposed rules that would have required advisers to place all client assets, including crypto, with an approved custodian. The proposal faced criticism, including from Peirce, who argued that advisers could be left without a compliant place to keep some crypto assets.
The SEC eventually withdrew those rules in June 2025. After that, the agency took some steps to make crypto custody easier for regulated firms. In September 2025, its investment management division said it would not recommend enforcement in certain cases involving state-chartered trust companies acting as banks for crypto custody, provided specific conditions were met.
The latest proposal now goes further by putting the framework into formal rules. It also includes changes related to financial-statement audits and broker-dealer custody services used by regulated funds.
Meanwhile, SEC continues to work on a wider set of crypto rules. For the time being, firms and other interested parties have 60 days to submit their comments. The feedback could influence what the final rules eventually look like.
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