The US Securities and Exchange Commission (SEC) is moving forward with plans to overhaul custody rules for investment advisers and investment companies. The proposal could potentially provide institutions with greater clarity on how they can hold crypto assets for clients while complying with federal securities rules.
The proposed rule was submitted on Aug. 25 to the Office of Information and Regulatory Affairs (OIRA), which is part of the White House Office of Management and Budget. The office will review the proposal before it returns to the SEC and is potentially released for public comment.
According to the SEC's regulatory agenda, the agency is considering modifying existing rules or introducing new ones under the Investment Advisers Act and the Investment Company Act. These changes would govern how investment advisers and funds hold client assets, specifically including digital assets.
The regulator stated that the changes are intended to address uncertainty surrounding how companies can hold crypto for clients while remaining compliant with federal rules. The proposal has not yet been made public, and the Office of Management and Budget retains the authority to request changes before returning the document to the SEC. Following that review, the commission would vote on whether to release the proposal for public comment.
Reports indicate that the proposed rule forms part of a broader effort to advance the digital asset agenda while the CLARITY market structure bill remains stalled in the Senate. The bill is anticipated to face a cloture vote after lawmakers return from the August recess in September.
Shift Toward Formal Rulemaking
The SEC has adopted a more crypto-friendly approach following Paul Atkins becoming chair in 2025, shifting its primary focus from enforcement actions toward developing clearer rules for the industry. Atkins previously pledged to end the agency's reliance on regulation through enforcement, asserting that policymaking should occur through formal rulemaking processes.
This strategic shift has also manifested in recent enforcement decisions. During 2025, the SEC dismissed several cases against major cryptocurrency companies, including its lawsuit against Coinbase, as part of its ongoing reorganization of digital asset oversight.
