SEC Sends Crypto Custody Rule Overhaul to White House
The SEC’s custody rules determine how registered investment advisers and investment companies safeguard client and fund assets, including crypto. A 2023 proposal under then-Chair Gary Gensler would have steered advisers toward a narrow group of “qualified custodians,” such as chartered banks or trust companies, SEC-registered broker-dealers and CFTC-regulated futures commission merchants. It drew objections over cost and access, was never finalized and was withdrawn in 2025. The issue matters because custody rules shape institutional participation while setting protections for investors’ assets.
On Aug. 25, 2026, the SEC submitted “Amendments to the Custody Rules” to the White House Office of Management and Budget for review, a preliminary step before the agency can publish a formal proposal. The public agenda classifies the item as economically significant and deregulatory, with a notice of proposed rulemaking tentatively scheduled for October 2026. Details remain undisclosed, but the SEC says the overhaul would clarify crypto custody for investment advisers and investment companies, modernize outdated provisions and remove burdens no longer needed for investor protection as market and asset-holding practices evolve.
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The history behind this eventU.S. SEC Could Propose New Rule as Soon as This Month to Ease Crypto Startup Fundraising
The U.S. Securities and Exchange Commission has long applied securities laws to crypto-asset issuance and fundraising, leaving development teams uncertain about whether tokens qualify as securities and must be registered. The proposed “Regulation Crypto” would provide a temporary registration exemption, reducing compliance costs for startups and signaling a shift in the SEC's regulatory approach toward supporting industry growth.
The SEC is expected to propose its first major crypto rule as soon as July 2026, with a safe harbor for crypto developers, startups and fundraising activities at its core. The proposal would ease registration requirements and barriers to raising capital. The duration of the exemption, eligibility conditions and fundraising cap have not been disclosed. The measure would still be subject to public consultation and a formal rulemaking process.
SEC Reassesses Approval Rules for Novel Crypto ETFs, Opens Public Consultation
The U.S. Securities and Exchange Commission is reviewing its approval framework for novel exchange-traded funds, including nontraditional products involving cryptocurrencies, tokenized assets and event contracts. The review centers on whether such funds should qualify for an automatic approval mechanism, with implications for issuers’ listing timelines, compliance costs and investor-protection standards.
The SEC has opened a 60-day public comment period on proposed changes to U.S. rules governing novel ETFs, seeking market participants’ views on an automatic approval system and the conditions under which it should apply. The process does not mean new products will be approved immediately, but it could change the review threshold for ETFs involving cryptocurrencies and other assets. No monetary amounts or date for a final decision have been disclosed.
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