SEC Proposes Crypto Asset Custody Rules for Advisers and Funds
The U.S. SEC published proposed rules that, under certain conditions, would expand custody options for crypto assets held by registered investment advisers and regulated funds.
SEC crypto asset custody is the subject of a proposal published in the Federal Register on October 6, 2026. The proposal addresses how registered investment advisers and regulated funds in the U.S. may hold clients’ crypto assets. Subject to specified conditions, it allows custody through state-chartered trust companies as well as so-called self-custody carried out by the adviser or fund itself.
However, this is not a rule that would change how ordinary holders of digital assets use their own crypto wallets. In this case, the SEC uses the term self-custody to mean custody of client assets carried out by a regulated adviser or fund, not personal crypto management by a retail investor.
SEC crypto asset custody and self-custody conditions
The proposed amendments concern the custody regime for assets held by registered investment advisers and regulated funds. The proposal sets out the circumstances under which crypto assets may be held under federal custody rules.
One option would be to use state-chartered trust companies as custodians. The other is custody carried out directly by the adviser or fund, referred to in the materials as self-custody. This option is not unconditional.
Under the proposal, an adviser could use it only if, after conducting appropriate due diligence, it reached a reasonable conclusion that a qualified custodian was not available for the specific crypto asset. The proposal therefore does not establish a general authorization to hold client crypto assets using one’s own resources without reviewing alternatives.
This is not a new retail right to self-custody
In crypto, the term self-custody is commonly used for a situation in which an individual controls their wallet’s private keys. In the SEC’s announced proposal, however, it has a narrower, institutional meaning.
SEC Commissioner Hester Peirce explained in a statement on the proposal that the term refers to custody carried out by an adviser. The proposal therefore should not be interpreted as a direct change to the rules for retail users who manage their own digital assets.
The distinction is also important when assessing the document’s practical impact. The proposal focuses on the relationship between a regulated adviser or fund and client assets, not on the ordinary use of personal wallets.
Comments on the proposal may be submitted by December 7
The proposal is not yet an effective rule. The public and market participants may submit comments by December 7, 2026. After that, it will be up to the SEC to decide whether to revise the text, approve it, or change its next steps.
Issues under review will include the requirements for security controls, recordkeeping, and custodian due diligence. The responses of state-chartered trust companies and registered investment advisers to the proposal will also be relevant.
The final wording of the rules, the date of any potential effectiveness, and the scope of their practical use are not yet known. It has also not been confirmed how many advisers, funds, or state-chartered trust companies would use these options if approved.
Sources
- U.S. Securities and Exchange Commission — press release – Confirms that the SEC announced the proposal on October 1, 2026, its scope, and the conditional options for self-custody and state-chartered trust companies.
- Federal Register — Adviser and Regulated Fund Custody Rules; Crypto Custody Rules – Confirms publication on October 6, 2026, the December 7, 2026 comment deadline, and the condition that a qualified custodian be unavailable for adviser self-custody.
- SEC — statement by Commissioner Hester Peirce – Explains that the term “self-custody” in the proposal refers to custody carried out by an adviser, not investors’ self-management of assets.
Verified and updated: October 10, 2026 15:19
