SEC Prepares New Crypto Custody Rules

The U.S. Securities and Exchange Commission is moving closer to proposing new crypto custody rules as the regulator builds out its digital asset framework while congressional legislation remains uncertain.

The SEC has sent a custody proposal covering investment advisers and broker-dealers to the White House Office of Management and Budget for review. The initiative is designed to clarify how traditional financial firms can hold both crypto securities and non-security digital assets.

Taylor Lindman, chief counsel of the SEC’s Crypto Task Force, said Tuesday that the agency wants broker-dealers to understand how they can custody non-security crypto assets without requiring special registration. The SEC also aims to provide investment advisers with clearer guidance on where client digital assets can be held, including state-chartered trust companies.

The broader objective is to integrate blockchain and cryptocurrency into the existing U.S. securities market infrastructure, allowing established intermediaries to hold and transact in digital assets under clearer regulatory standards.

Once the proposal completes White House review, the SEC can formally publish it and open a public comment period.

The new framework would build on earlier SEC actions addressing crypto custody. In September 2025, SEC staff provided no-action relief allowing certain state-chartered trust companies to serve as custodians for crypto assets under federal investment laws, although Commissioner Caroline Crenshaw raised concerns about investor safeguards under that approach.

The current effort marks a shift from the SEC’s unsuccessful 2023 custody proposal under former Chair Gary Gensler. That plan would have imposed tighter restrictions on where investment advisers could store client crypto assets and faced substantial industry opposition before ultimately being abandoned.

Crypto custody is part of a broader SEC push to establish rules for the U.S. digital asset market. The regulator has also proposed a crypto offering framework and recently introduced a five-year “innovation exemption” designed to facilitate onchain trading of tokenized U.S. stocks.

Lindman described the SEC’s work as laying the regulatory foundation needed to bring stablecoins, non-security crypto assets and blockchain-based financial products into a more durable framework for U.S. markets.