The U.S. SEC has proposed new requirements for how registered investment advisers and some regulated funds hold and protect crypto assets. The draft covers custody, reporting, records and disclosures. No final rule has been adopted.
What the SEC’s custody proposal would require
The proposal is listed as SEC file S7-2026-35, with public comments due December 7, 2026. The SEC’s materials discuss conditions for certain self-custody arrangements and the use of state trust companies as custodians. Any option would depend on the final rule’s wording and eligibility requirements.
Why safeguarding crypto assets matters
The SEC’s proposal, file S7-2026-35, was issued on October 1 and published in the Federal Register on October 6, 2026. It addresses custody arrangements for registered investment advisers and regulated investment funds, including investment companies and business development companies. It also proposes changes to reporting and recordkeeping requirements.
The regulator is seeking public comments through December 7, 2026. These are proposed requirements, not an immediately effective custody rule. Investors should distinguish between a fund that holds crypto through a supervised custodian and a customer keeping crypto in a personal wallet; different legal duties and operational risks may apply.
Crypto custody involves private-key security, access controls, wallet administration, recordkeeping and oversight of third-party providers. Advisers and funds would need to assess how any final requirements affect their existing arrangements and compliance procedures. The proposal does not itself authorise a firm to use a particular custody model.
What happens next
The SEC will review public comments before deciding whether to revise, adopt or withdraw the proposal. Firms should continue following current obligations and should not treat proposed options as current authorisations. The commission is also considering a separate digital-asset rulemaking proposal.
Primary sources
Related Reading
For related custody developments, see our coverage of Standard Chartered’s deal to acquire Zodia Custody and the Coinbase Ireland safeguarding fine.
This report summarises public regulatory materials and is not legal or investment advice.
