SEC Submits Crypto Custody Rule Update to White House

The U.S. Securities and Exchange Commission has submitted a proposal to the White House to update how investment advisers and funds hold cryptocurrency for clients, a move that advances the Trump administration's digital asset agenda while key market structure legislation remains stalled in Congress. The proposal, titled Amendments to the Custody Rules, was sent to the Office of Information and Regulatory Affairs, an arm of the White House Office of Management and Budget, on August 25, 2026. The rulemaking aims to clarify the framework for the custody of crypto assets under existing federal securities laws and remove outdated provisions the agency says no longer serve investor protection.

The SEC stated that investment advisers have raised questions about how they can legally hold clients' digital assets under current rules. The proposed changes would affect the Investment Advisers Act and the Investment Company Act, which regulate how client assets are held. The agency said the effort would modernize regulations to address crypto assets while making other updates to remove burdens from provisions that are no longer needed given the evolution in markets and security trading...