SEC advances crypto custody rule changes for White House review

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SEC crypto custody rule review

Highlights

SEC advances a rule proposal clarifying crypto asset custody requirements for investment advisers, forwarding it to the Office of Information and Regulatory Affairs for review.
Over the past year, the SEC under Chair Paul Atkins has redefined digital asset policy, including guidance excluding memecoins from securities status and revising staking rules.
SEC launched Regulation Crypto Assets last week, introducing a specialized regime for capital raising and investor protection, and is considering an innovation exemption for tokenized securities offerings.

Rule update targets adviser crypto custody

As reported by The Block, citing Bloomberg, the proposal has been sent to the Office of Information and Regulatory Affairs, part of the Office of Management and Budget, for review before publication. The SEC says investment advisers have raised questions about how they can hold crypto assets for clients while remaining in compliance with existing custody requirements.

The regulator says the rulemaking would clarify the framework for custody of crypto assets by investment advisers and investment companies. It also says the changes would modernize outdated provisions that no longer need to remain in place to protect investors given shifts in markets and in trading and custody practices.

Broader crypto policy shift gains pace

Over the past year, the SEC under crypto-friendly Chair Paul Atkins has been pursuing a wider regulatory overhaul for digital assets. The agency has issued guidance stating that memecoins are not securities and outlining which staking activities fall outside securities law.

Last week, the SEC introduced Regulation Crypto Assets, which it describes as a tailored offering regime aimed at helping firms raise capital while maintaining investor protections. That proposal builds on guidance issued in March by the SEC and the Commodity Futures Trading Commission on how federal securities laws apply to digital assets and related transactions.

Market attention also remains on a possible innovation exemption. Atkins says he plans to create a framework to fast-track crypto products, though that proposal has not yet been finalized; such an exemption would offer regulatory relief for firms seeking to issue tokenized securities on decentralized or other novel platforms.

In our earlier coverage of the Digital Asset Market Clarity Act, we outlined how U.S. lawmakers were moving toward a key Senate procedural vote aimed at defining the regulatory framework for cryptocurrencies and clarifying the SEC–CFTC split of oversight. We also noted that prediction-market pricing implied low confidence the bill would become law on an accelerated timeline, even as White House pressure and broader market interest kept attention on the measure’s potential impact.

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