SEC Proposes Crypto Asset Custody Rules for Advisers and Funds
On October 1, 2026, the U.S. SEC published proposed rules for the custody of crypto assets by registered investment advisers, funds and business development companies.
On October 1, 2026, the U.S. Securities and Exchange Commission (SEC) published the SEC proposal on crypto asset custody for registered investment advisers, registered investment companies and business development companies. The document does not change current obligations for now. It proposes a federal framework for these regulated entities to hold digital assets.
The proposal applies to situations in which advisers or funds work with clients’ or investors’ crypto assets. Existing custody rules were created primarily for traditional types of assets. The SEC therefore proposes specific conditions for digital assets, including rules for custodians, recordkeeping and audits.
What the SEC proposal on crypto asset custody would introduce
The SEC says the proposal would, subject to specified conditions, allow registered advisers and regulated funds to use so-called self-custody, meaning to custody crypto assets themselves. The specific conditions, however, will be subject to the proposed rule and subsequent public comment.
Another proposed option is the use of state trust companies as custodians. The proposal is intended to determine who may, under defined circumstances, hold crypto assets on behalf of regulated entities.
The text also goes beyond the holding of assets itself. It includes broader changes to custody, recordkeeping and audit rules, as well as changes to public forms. This includes Form ADV, used by investment advisers, and Form N-CEN for registered investment companies.
The proposal is not an effective rule
The SEC has not definitively approved anything yet. This is a proposed rule on which comments may be submitted during the 60 days after its publication in the Federal Register. As of the proposal’s publication date, no specific Federal Register publication date or exact comment deadline had been provided.
Therefore, registered advisers, funds and custody providers face no immediate change in their obligations. The immediate step is the start of a process in which affected parties may respond, particularly to the conditions for self-custody and the recognition of state trust companies as custodians.
Why the proposal matters for regulated crypto strategies
Custody is a critical operational and regulatory issue in the management of crypto assets. The SEC proposal directly places these topics within the framework applicable to registered advisers and funds.
The rules could therefore become relevant to entities that offer or are considering crypto asset strategies for regulated investors. Their specific impact cannot yet be determined, however, because the final wording of the rule is unknown and the SEC may change the proposal after the comment process.
What to watch next
- the publication date of the proposal in the Federal Register and the exact deadline for submitting comments,
- comments on the conditions for self-custody and the status of state trust companies,
- whether the SEC adopts a final rule, in what form and with what effective date.
The practical use of the proposed self-custody arrangement and the availability of custodians therefore remain open questions. The published document is a basis for regulatory discussion, not a final guide to complying with new obligations.
Sources
- U.S. Securities and Exchange Commission – press release 2026-100 – Confirms that the SEC proposed a crypto asset custody framework on October 1, including the possibility of self-custody under certain circumstances, the use of state trust companies and a 60-day comment period after publication in the Federal Register.
- U.S. Securities and Exchange Commission – Proposed rule IA-7023 / IC-36353 – The primary 760-page proposal confirms that this is a proposed rule, its legal scope, changes to recordkeeping and forms, and the fact that the exact comment deadline depends on publication in the Federal Register.
- U.S. Securities and Exchange Commission – Fact Sheet – Briefly confirms the proposed self-custody arrangement subject to conditions and the possibility of using state trust companies.
- CoinDesk – Independently describes the proposal as another step in the SEC’s digital asset regulatory agenda and notes that self-custody is intended to be limited.
Verified and updated: 10/02/2026 06:19
