SEC proposes new custody rules for crypto assets held by advisers and funds

The US Securities and Exchange Commission has formally proposed new custody rules covering crypto assets. The proposal targets registered investment advisers and regulated funds. What the SEC actually proposed The SEC unveiled the proposal on October 1, 2026. Its formal title is “Adviser and Regulated Fund Custody Rules; Crypto Custody Rules,” filed under File No. S7-2026-35. According to the Commission, the rules are designed to update custody regulations and support crypto investment advice for registered advisers and funds. The proposal aims to modernize existing custody standards. It also seeks to improve transparency in how firms handle reporting and recordkeeping. The framework is meant to help firms meet their ongoing obligations under two foundational laws. Those are the Investment Advisers Act and the Investment Company Act. How we got here The SEC put out a safeguarding proposal in 2023. That earlier effort was withdrawn in June 2025, clearing space for a revised approach. In September 2025, the SEC issued a no-action letter that permitted select state-chartered trust companies to serve as qualified custodians for crypto assets. Interim guidance issued in 2025 helped brid...