The announcement of the proposed custody rules coincides with the departure of Commissioner Hester Peirce, who has led the SEC's Crypto Task Force since its inception.
By Jesse Hamilton|Edited by Nikhilesh DeUpdated Oct 1, 2026, 4:54 p.m. EDTPublished Oct 1, 2026, 4:20 p.m. EDT2 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on SEC Chairman Paul Atkins (Jesse Hamilton/CoinDesk)SummaryShow- The U.S. Securities and Exchange Commission (SEC) introduced its new crypto custody proposal on Thursday, adding an important element to its digital asset strategy.
- This proposed rule aims to clarify how investment firms can manage the crypto assets of their clients, while also enabling advisers to self-custody those funds.
- The release reflects the SEC's ongoing efforts to establish clearer regulations for cryptocurrencies, following recent announcements regarding the Innovation Exemption and Regulation Crypto.
The SEC is working to delineate how investment firms may manage and safeguard client crypto assets through a proposed rule released on Thursday.
According to SEC Chairman Paul Atkins, the proposal "would provide a clear regulatory framework for the custody of crypto assets, giving investment advisers and funds a compliant pathway where none existed before — and replacing the grey of uncertainty created by custody rules crafted for a bygone era,” as stated in a recent announcement.
This proposal will specify which types of companies are allowed to hold crypto assets and outline the necessary record-keeping and federal disclosure requirements for investment advisers and regulated funds, among other clarifications regarding industry practices and auditing standards.
As per the 760-page proposal, the SEC is permitting self-custody for advisers wanting to manage their clients' funds. This self-custody is defined in a manner specific to asset management firms, differing from the typical usage in the crypto sector. Advisers must demonstrate expertise in managing crypto assets and must only pursue self-custody if they cannot find a qualified custodian.
Additionally, the proposal introduces various security and control regulations, requiring advisers to perform quarterly evaluations, as noted by an SEC official, with implications for newly launched tokens not yet supported by custodians.
Atkins emphasized that existing custody regulations were intended to safeguard advisory clients' assets from loss, theft, misuse, and misappropriation, but were only applicable to traditional assets, which is inadequate in the current digital landscape.
The newly proposed rule is now open for a 60-day public comment period and will permit self-custody of crypto assets "under certain circumstances" while allowing state-chartered trusts to act as custodians.
This recent initiative to promote a pro-crypto agenda within U.S. securities regulation coincides with the departure of Commissioner Hester Peirce, who has led the Crypto Task Force and will transition to an academic role in Virginia. Her exit leaves the SEC with only two commissioners. Earlier this week, the SEC announced a change in quorum requirements, reducing the number of commissioners needed to make decisions from three to two. If one commissioner is conflicted out of a decision, the remaining commissioner can still proceed.
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State of CryptoExploring the intersection of cryptocurrency and government.PreviewBy signing up, you will receive emails about CoinDesk products and you agree to our terms & conditions and privacy policy.With this advancement in custody regulations, the SEC has successfully addressed all major topics outlined in its initial crypto agenda set forth by Atkins.
The SEC has also recently released its long-awaited "Innovation Exemption" for tokenizing securities, detailing how companies can leverage blockchain technology for traditional securities. Moreover, it proposed its Regulation Crypto Asset, which offers guidance on how firms can raise funds through digital assets while remaining compliant with federal regulations.
UPDATE (Oct. 1, 2026, 20:55 UTC): Adds additional detail from release and links.
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