The U.S. Securities and Exchange Commission (SEC) has begun moving toward a major update to custody rules that govern how investment advisers and investment companies hold client assets, a change that could directly affect institutional crypto custody.
According to the SEC’s regulatory filings, the agency submitted “Amendments to the Custody Rules” to the White House Office of Information and Regulatory Affairs (OIRA) on Aug. 25 as part of the federal review process. The proposal would then return to the SEC for internal consideration before potentially being released for public comment.
Key takeaways
- The SEC has sent proposed custody rule updates to OIRA for review under White House regulatory procedures.
- The changes target how investment advisers and investment companies hold client assets, including crypto, under the Investment Advisers Act and Investment Company Act.
- The stated goal is to reduce uncertainty for institutions trying to comply with existing federal securities rules while holding digital assets.
- The draft is not yet public, and OIRA and the White House Office of Management and Budget can request modifications before it returns to the SEC.
What the SEC is trying to change
The SEC’s regulatory agenda indicates that the custody proposal could amend existing rules or introduce new requirements under the Investment Advisers Act and the Investment Company Act. Those frameworks apply to firms managing client money and other assets, including assets that may be held in custody arrangements—an area where market participants have long sought clearer guidance for digital-asset holdings.
In its description of the effort, the SEC said the intended purpose is to clarify how companies can hold crypto for clients while remaining consistent with the agency’s securities-law custody framework. The SEC emphasized that the proposal is designed to address uncertainty, but it has not yet published the rule text for public scrutiny.
Once OIRA completes its review, the draft would come back to the SEC. From there, the commission would decide whether to circulate the proposal for public comment.
How the OIRA process could shape timing and scope
The custody rule effort is currently in a pre-publication stage. As reported by Bloomberg, the SEC sent the proposal to OIRA, which sits within the White House Office of Management and Budget, on Aug. 25. That step matters because it is not merely administrative: the White House can ask for changes before the proposal returns to the SEC.
Only after that review cycle would the SEC determine whether to release the proposal for public comment—an important milestone for institutions because public comments can influence how custody obligations, compliance expectations, and operational constraints are ultimately written into regulation.
At present, the main practical takeaway for affected firms is that the proposal is moving, but the actionable details remain unavailable. Custody providers and asset managers will likely be watching for the published draft text and any adjustments that occur during OIRA’s review.
Why this fits the SEC’s broader digital-asset direction
Bloomberg linked the custody rule initiative to the SEC’s wider effort to support the Trump administration’s digital asset agenda, even as a separate piece of market-structure legislation remains stalled in Congress.
The article noted that the broader goal is occurring while the CLARITY market structure bill is still pending in the Senate. According to Cointelegraph’s earlier reporting, the bill is expected to face a cloture vote after lawmakers return from the August recess in September, suggesting continued legislative uncertainty around digital-asset rules at the federal level.
In that environment, rulemaking inside the SEC becomes particularly consequential for institutional participants. Custody is not just a compliance checkbox; it affects how funds and advisers structure client asset handling, choose custody models, and document safeguards—core concerns for asset managers considering or already providing crypto exposure.
From enforcement to rulemaking: institutional impact
Crypto market participants have closely tracked the SEC’s shift in posture under Paul Atkins, who became chair in 2025. Multiple reports in the crypto industry described a move away from what critics called “regulation through enforcement” toward formal rulemaking.
Earlier coverage from Cointelegraph has said Atkins pledged to end the SEC’s prior approach and to pursue policy development through established rulemaking channels. That shift is reflected in reported enforcement decisions as well: Cointelegraph previously reported that the SEC dismissed several cases against prominent crypto companies in 2025, including its lawsuit against Coinbase, as it sought to reshape how it regulates digital assets.
The SEC’s custody-rule proposal fits into that broader pattern. Even though the SEC has been less aggressive in some enforcement areas, institutions still need regulatory clarity for the mechanics of custody and client asset protection—areas where existing uncertainty can slow adoption or increase compliance risk.
For investors and intermediaries, a clearer custody framework could translate into better-defined standards for eligibility, controls, and operational practices. It may also reduce the reliance on case-by-case enforcement logic when deciding how to hold and safeguard client assets that include crypto.
What to watch next
Readers should watch for the custody proposal to be published after the OIRA/OMB review and for the SEC’s decision on whether to open a public comment period. The key uncertainty remains the draft’s contents—especially how it will address crypto custody within established custody rules under the Investment Advisers Act and Investment Company Act.
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