ENINVESTMENT REGULATION & DIGITAL ASSETS · OCTOBER 4, 2026
SEC Proposes New Crypto-Custody Framework for Advisers and Funds
The SEC proposed tailored custody rules for registered investment advisers and regulated funds, including conditional self-custody and potential use of state trust companies, with comments due 60 days after Federal Register publication.
What the SEC proposed
Source publication date: October 1, 2026. The Securities and Exchange Commission proposed rules and amendments intended to create a tailored crypto-asset custody framework for registered investment advisers, registered investment companies, and business development companies. The proposal would update custody requirements and related provisions under the Investment Advisers Act and Investment Company Act.
- 01Applies to advisers and regulated funds
- 02Conditional self-custody contemplated
- 03No final rule yet
The proposal describes additional custody pathways
The SEC said the proposal would permit self-custody under specified circumstances and allow state trust companies to serve as custodians for client and regulated-fund crypto assets. It also addresses financial-statement audits for registered advisers and broker-dealer custodial services for regulated funds. The public-comment period remains open for 60 days after the proposing release is published in the Federal Register.
A proposal does not eliminate asset or counterparty risk
The announcement does not make every crypto asset suitable, guarantee that a custodian can return assets, or resolve technology, cybersecurity, valuation, liquidity, tax, insolvency, conflict, or legal-ownership questions. Investor outcomes can depend on the specific asset, wallet structure, private-key controls, segregation, subcustodians, smart contracts, trading venue, disclosures, and contractual remedies.
Practical investor takeaway
Confirm that the action remains proposed and identify the rules currently governing the adviser, fund, and custodian. Review legal title, account segregation, key management, authorization controls, independent verification, audit scope, insurance, incident response, fees, liquidity, valuation, conflicts, leverage, and redemption terms. Qualified securities, tax, technology, and custody advisers should evaluate the actual structure before capital is committed.
Investors should treat the action as a proposal and verify custody, legal ownership, segregation, controls, audits, insurance, liquidity, fees, conflicts, and exit mechanics before committing capital.
Discuss a financing need →This independent summary is based on the cited source and is provided for general educational purposes only. Terms and program requirements may change.