SEC Proposes Crypto Custody Framework Allowing Self-Custody and Broader Product Access for Investment Advisers and Funds

The U.S. Securities and Exchange Commission proposed new rules on October 1, 2026 to establish a tailored custody framework for crypto assets held by registered investment advisers and regulated funds, including registered investment companies and business development companies. The proposal, championed by SEC Chairman Paul S. Atkins, is designed to replace what Atkins called the "grey of uncertainty" left by custody rules built for a prior era.

Under the proposal, crypto assets could be held in self-custody under certain defined circumstances, and state trust companies would be permitted to serve as qualified custodians for client and fund crypto assets. The rules would be made under both the Investment Advisers Act of 1940 and the Investment Company Act of 1940, and would also update requirements around financial statement audits for registered investment advisers and broker-dealer custodial services for regulated funds.

The framework would remove regulatory barriers that have prevented advisers from offering crypto-related investment advice and allow regulated funds to offer clients access to a wider range of crypto asset strategies. A public comment period will run for 60 days following publication in the Federal Register.