Regulation ·
SEC proposes custody rules for crypto held by advisers and funds
A new framework would set out how registered investment advisers and funds can hold bitcoin, ether and other crypto for clients.
What happened
On October 1, 2026, the SEC proposed a custody framework for crypto assets held for clients of registered investment advisers and for registered funds and business development companies.
For advisers, it covers crypto that counts as client “funds or securities”. For regulated funds, it covers a broader category of “securities and similar investments” that includes bitcoin, ether and solana.
The proposal also updates several non-crypto rules. Comments are due 60 days after it is published in the Federal Register.
My take Opinion, not advice.
Custody is boring until it isn't. Every big blow-up I've read about started with someone else holding the coins.
Clear custody rules make it easier for advisers and funds to hold crypto at all. That's a slow, structural story, not a next-week story.
What I'm watching
- Federal Register publication and the comment deadline
- Who qualifies as a crypto custodian
- Industry comment letters
Source: Sidley Austin, “SEC Proposes Crypto Custody Rules and Broader Custody Reforms for Registered Investment Advisers and Regulated Funds”, October 2026.