TLDR
- The SEC has sent proposed changes to crypto custody rules to the White House Office of Management and Budget for review
- The changes would clarify how investment advisers and funds can hold crypto assets for clients under federal law
- The proposal has not yet been made public and could be revised before returning to the SEC
- SEC Chair Paul Atkins has led a shift away from enforcement toward formal rulemaking since taking over in 2025
- The move comes as the CLARITY market structure bill remains stalled in the Senate
The SEC is pushing forward with a plan to rewrite the rules around how investment advisers hold crypto for their clients. The proposal was sent on August 25 to the Office of Information and Regulatory Affairs, part of the White House Office of Management and Budget, before it can move forward.
SEC Prepares Crypto Custody Rule Overhaul for Investment Advisers and Funds
According to Bloomberg, the SEC sent a new proposal to the White House Office of Management and Budget on Aug. 25 to clarify the custody framework for crypto assets held by investment advisers and… pic.twitter.com/Kepg1PfMni
— Wu Blockchain (@WuBlockchain) August 26, 2026
The agency said it received questions from investment advisers about how to hold crypto while staying within its existing rules. This proposal aims to clear that up.
The SEC described the rulemaking as a way to “clarify the framework for the custody of crypto assets for investment advisers and investment companies.” It would also remove outdated provisions the agency says are no longer needed.
The proposal has not yet been made public. The 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.
A Shift in Direction Under Chair Paul Atkins
The SEC has taken a more crypto-friendly stance since Paul Atkins became chair in 2025. He pledged to end the agency’s “regulation through enforcement” approach and replace it with formal rulemaking.
The agency dropped several lawsuits against major crypto companies in 2025, including its case against Coinbase. It also released guidance stating that memecoins are not securities and clarified which staking activities fall outside securities law.
Last week, the SEC introduced “Regulation Crypto Assets,” described as a tailored offering regime to help companies raise capital while protecting investors. That built on guidance released earlier in the year alongside the Commodity Futures Trading Commission.
Atkins has also said he plans to introduce an innovation exemption to fast-track crypto products, though that framework has not yet been released.
Where the CLARITY Act Stands
The custody rule push comes as the CLARITY market structure bill remains stalled in the Senate. The bill is expected to face a cloture vote when lawmakers return from the August recess in September.
Bloomberg reported the custody proposal is part of the SEC’s broader effort to advance the Trump administration’s digital asset agenda while legislation moves slowly through Congress.
The next step for the custody rule is a return to the SEC after White House review. Commissioners would then vote on releasing the proposal for public comment, opening a period where industry participants and the public can weigh in.
No timeline has been set for when that vote might occur.
