TLDR
- The SEC proposed a new rule on Thursday to govern how investment advisers and funds custody crypto assets.
- The rule would let advisers self-custody client crypto in limited cases, such as when no qualified custodian is available.
- State-chartered trusts would be allowed to serve as custodians under the proposal.
- The announcement comes a day before Commissioner Hester Peirce leaves the agency after leading its Crypto Task Force.
- The proposal opens a 60-day public comment period and follows the failed Clarity Act vote in the Senate.
The U.S. Securities and Exchange Commission released a proposed rule on Thursday aimed at clarifying how investment advisers and regulated funds can custody crypto assets.
🚨NEW: The @SECGov’s crypto custody proposal for investment advisers and regulated funds has landed.
It includes allowing self-custody in certain cases and state trust companies to serve as custodians. https://t.co/ItqgE9zOVo
— Eleanor Terrett (@EleanorTerrett) October 1, 2026
SEC Chairman Paul Atkins said the current custody rules were built for a different era. He said they only covered traditional assets and left firms without clear guidance on digital ones.
The proposal is 760 pages long. It lays out new standards for who can hold crypto on behalf of clients and how those firms must keep records.
What the Rule Would Allow
Under the proposal, advisers could use self-custody in specific situations. This would mainly apply when no qualified custodian is willing or able to hold a particular asset.
An SEC official said this circumstance is expected to be rare. One example given was a newly launched token that custodians have not yet added support for.
Firms using self-custody would need certain expertise to manage the assets safely. They would also need to review every quarter whether a qualified custodian has since become available.
The rule would also permit state-chartered trust companies to act as custodians. This gives advisers and funds another option beyond traditional federal custodians.
Commissioner Hester Peirce addressed the term “self-custody” directly. She clarified it refers to advisers holding assets for clients, not individual investors holding their own crypto.
“True self-custody is not the right choice for everyone, but many crypto owners prize being able to custody their own assets,” Peirce said in a statement.
Timing and What Comes Next
The proposal arrives the day before Peirce’s last day at the agency. She has led the SEC’s Crypto Task Force since it was created and will next teach in Virginia.
Her departure leaves the SEC with two commissioners. Earlier this week, the agency lowered the number of commissioners needed for a quorum from three to two.
The public comment period for the custody proposal will stay open for 60 days. After that, the SEC will decide whether to finalize the rule.
This proposal follows other recent moves by the SEC on crypto policy. The agency already issued its Innovation Exemption for tokenizing securities and proposed a separate rule called Regulation Crypto Asset for digital fundraising.
Both the SEC and the Commodity Futures Trading Commission have moved on crypto rules after the Clarity Act failed in the Senate. The CFTC has also filed its own crypto rulemaking plans with the White House.
Atkins said more proposals are expected. He said the agency plans to keep working toward making the United States a center for crypto activity.
With this custody proposal, the SEC has now addressed every major item on the crypto agenda Atkins laid out earlier this year.
