The Securities and Exchange Commission (SEC) announced it is revisiting regulations concerning who should safeguard customer cryptocurrency as part of a proposal to update the Custody Rule.
On August 25, the SEC submitted its proposed amendments to the Custody Rule to the Office of Information and Regulatory Affairs (OIRA), which reviews economically significant regulations. The submission followed a White House cryptocurrency meeting involving President Donald J. Trump and industry executives. Because the amendments are classified as an economically significant regulation, they are currently under review by the White House.
Commissioners are prohibited from voting on or disclosing information about the rulemaking until the OIRA review is complete. The SEC anticipates publishing the proposed rulemaking no later than October 2026, after which a minimum 60-day public comment period will follow.
The proposed amendments have not yet been released publicly and require further analysis and a second commission vote before taking effect. Industry participants are expected to wait several years before compliance becomes mandatory.
Meanwhile, data shows that institutions continue to position themselves for broader crypto exposure through exchange-traded funds. In the second quarter of 2026, institutional Bitcoin ETF holdings increased by 7.5% to 535,723 BTC, even as Bitcoin's price declined by 14.2%. Institutional ownership rose to a high of 44.2%, up from 38.4%, while total ETF holdings decreased by 6.6% to 1.21 million BTC.
Moving beyond ETFs presents additional hurdles, including annual custody fees ranging from four to 15 basis points and insurance coverage varying from $200 million to $750 million to protect advisers. Smaller advisers may also face higher compliance costs, leaving future filings to determine whether regulatory reforms will extend adoption beyond existing regulated funds.
