The Securities and Exchange Commission (SEC) has sent its rewritten crypto custody rule to the White House. While the specific text of the proposal remains secret, regulatory filing labels indicate a shift toward easing compliance standards for investment advisers handling digital assets.
Filing Labels and Deregulatory Direction
The proposal, formally titled Amendments to the Custody Rules, reached the Office of Management and Budget (OMB) on August 25. The OMB record carries two primary labels. The first indicates that the rule is economically significant, carrying at least $100 million in yearly economic impact.
Crucially, the second label places the filing in the deregulatory column under Executive Order 14192, which was signed by President Donald Trump in January 2025. This order directs agencies to scrap ten rules for every new one they introduce, signaling that the SEC intends to loosen, rather than tighten, crypto custody duties.
An agenda abstract also reveals that the proposal directly names crypto assets and targets a formal release in October, which will open a public comment period.
Reversing Prior Policy
Existing rules require investment advisers to park client assets with a qualified custodian, typically a bank or broker-dealer. Because few traditional financial firms were willing to handle crypto, advisers had almost no compliant way to hold digital assets.
Under former Chair Gary Gensler, the SEC pushed in the opposite direction. His 2023 Safeguarding Rule sought to expand custody duties, and agency staff actively probed advisers regarding crypto custody before the plan was withdrawn in June 2025.
In the time since, industry participants have influenced the rewrite. Venture firm Andreessen Horowitz urged the SEC to modernize its standards, while lawyers from Delphi Ventures and Multicoin Capital submitted a framework in December 2025 advocating for the use of multi-signature and multi-party computation (MPC) wallets to split key control.
Broader Regulatory and Legislative Context
The custody filing arrived one week after the SEC proposed Regulation Crypto Assets, a framework designed to govern token fundraising. Together, the two proposals address both capital formation and institutional holding requirements.
Meanwhile, legislative efforts continue in Congress. The House passed the Clarity Act by a 294-134 vote in July 2025 to divide oversight between the SEC and the Commodity Futures Trading Commission (CFTC). However, the bill has stalled in the Senate and faces a 60-vote test around September 15, leaving its passage uncertain.
As the SEC moves forward independently, the next developments will depend on how long the OMB holds the rule and which firms request meetings while the text remains sealed.
