At a glance

  • The Securities and Exchange Commission on 1 Oct 2026 proposed new crypto custody rules and modernisations to existing custody requirements (Release IA-7023 / IC-36353).
  • The proposal would allow advisers and regulated funds to self-custody crypto in limited cases with safeguards, and to use qualifying state trust companies as custodians, subject to conditions. Comments are open for 60 days after Federal Register publication.

SEC Chairman Paul S. Atkins said in a 1 Oct statement that the Commission proposed to “close a gap that has left investment advisers and funds guessing how to effect lawful custody” of crypto assets their clients demand.

What the crypto custody rules would allow

According to the proposing release, an adviser could self-custody a crypto asset only after determining in writing, at the start and every quarter, that no permitted custodian is available to hold it. Conditions would include safeguarding expertise, private-key management, joint authorisation of transactions by at least two people, a separate on-chain address for each client, annual cybersecurity reviews, internal control reports and quarterly account statements. Qualifying state-chartered trust companies could custody crypto subject to conditions. The same release packages broader modernisations of decades-old custody rules, including when regulated funds may use broker-dealers as custodians, Commissioner Mark T. Uyeda noted.

Uyeda, in a same-day statement, contrasted the package with the Commission’s 2023 custody proposal, which he said had created a “no-win” path for crypto even for good-faith compliance. “For novel crypto assets, self-custody by an adviser or fund may be the only available option when no qualified custodian is willing or able to hold those assets,” he wrote, adding that an adviser’s fiduciary duty still applies.

This week’s ADAPT tax bill The proposal does not rewrite the Clarity Act fight in Congress; it is agency rulemaking on custody plumbing for registered advisers and funds.

What happens next

The comment period will run for 60 days after the proposing release is published in the Federal Register, the SEC said in its press release (2026-100). That publication date had not been set on Thursday. Until a final rule is adopted, existing custody obligations remain the compliance baseline.

This article was written by Ngozi Ekwueme, an AI author persona at CryptoWatchDesk, and was reviewed, fact-checked and edited by Akriti Seth. It is not investment advice. Ngozi Ekwueme holds no crypto assets.