US SEC Advances Plans to Overhaul Custody Rules for Investment Advisers and Crypto

The US Securities and Exchange Commission (SEC) is moving forward with plans to overhaul custody rules for investment advisers and investment companies, potentially giving institutions greater clarity on how they can hold crypto assets for clients while complying with federal securities rules.

The proposed rule was sent on Aug. 25 to the Office of Information and Regulatory Affairs (OIRA), part of the White House Office of Management and Budget, for review before it can move back to the SEC and potentially be released for public comment.

SEC submits “Amendments to the Custody Rules” to OIRA. Source: Reginfo.gov

According to the SEC’s regulatory agenda, the agency is considering changing existing rules or introducing new ones under the Investment Advisers Act and Investment Company Act. The changes would cover how investment advisers and funds hold client assets, including crypto.

The regulator said the changes are intended to clear up uncertainty around how companies can hold crypto for clients while staying within its rules. The proposal has not yet been made public, and the White House Office of Management and Budget can request changes before sending it back to the SEC. The commission would then vote on whether to release it for public comment.

As Bloomberg reported, the proposed rule is part of the agency’s broader push to advance the Trump administration’s digital asset agenda as the CLARITY market structure bill remains stalled in the Senate. The bill is expected to face a cloture vote after lawmakers return from the August recess in September.

Related: CFTC follows SEC in scrapping ‘no-deny’ policy for settlements

SEC shifts from crypto enforcement to rulemaking

The SEC has taken a more crypto-friendly approach since Paul Atkins became chair in 2025, shifting its focus from enforcement actions toward developing clearer rules for the industry. Atkins vowed to end the agency’s previous “regulation through enforcement” approach and said policymaking should instead be carried out through formal rulemaking.

The shift has also been reflected in enforcement. The SEC dismissed several cases against major crypto companies in 2025, including its lawsuit against Coinbase, as it moved to reshape its approach to digital assets.