SEC Proposes a Custody Framework for Crypto Assets at Advisers and Funds

What the Commission Proposed

The Securities and Exchange Commission announced on October 1, 2026, that it has proposed new rules and amendments on the custody of crypto assets by registered investment advisers and regulated funds. The Commission defined regulated funds, for this purpose, as registered investment companies and business development companies. The announcement, Press Release 2026-100, was issued from Washington and describes a tailored framework under the federal securities laws. The release presents a proposal. It does not say the Commission has adopted the rules, fixed an effective date, or finished notice and comment.

The Commission said the proposal would modernize custody rules and expand investor choice by removing regulatory barriers that inhibit an adviser's ability to provide crypto-related investment advice. It also said regulated funds would be able to offer clients access to a wider range of crypto asset-related investment strategies. Those sentences state the Commission's objectives for a proposing release. They do not show that advisers or funds have changed products, allocations, or custody arrangements, and they do not measure how much choice would actually expand.

Custody Arrangements the Release Identifies

Where the press release is specific, two custody paths are named. The proposal would permit crypto assets to be held in self-custody under certain circumstances. It would also allow state trust companies to serve as custodians for client crypto assets and for crypto assets of regulated funds. The announcement does not define those circumstances or identify which state trust companies could qualify. Any comparison with other custodians goes beyond what this announcement establishes.

The Commission said the proposed rules and amendments would better address current industry practices and update a number of requirements relating to, among other things, financial statement audits for registered investment advisers and broker-dealer custodial services for regulated funds. That qualifier means the proposing release covers items this press release does not summarize. Those items are not set out in the source text used here. The scope of the audit and broker-dealer changes cannot be stated more precisely than the Commission stated them.

Statutory Basis and the Chairman's Account

The Commission said the proposed rules and amendments fall under the Investment Advisers Act of 1940 and the Investment Company Act of 1940. That pairing matches the two groups named in the release: registered investment advisers, and registered investment companies together with business development companies. The press release does not give proposed rule numbers, quote statutory provisions, or explain how current custody requirements under those statutes would be rewritten.

Chairman Paul S. Atkins, in a statement the Commission cited, said the crypto asset market has grown since the advent of Bitcoin in 2008 from a niche curiosity into a multi-trillion-dollar asset class to which investors actively seek exposure. He said rules have not kept pace and that the proposal would provide a compliant custody pathway where none existed before. This article treats that market description, the 2008 reference, and the claim of no prior compliant pathway as the Chairman's assertions, not as separate findings of the press release.

Comment Timing and Open Questions

The public comment period will remain open for 60 days after the proposing release is published in the Federal Register. The press release does not say that publication has already occurred, and it does not give a calendar closing date. On the terms of the announcement, the 60 days run from Federal Register publication, not from the October 1 release. The Commission also listed a fact sheet and the proposed rule. The source page shows those titles only in truncated form and does not reproduce the rule text.

Questions that would determine how the framework operates are not answered in this announcement. It does not identify which crypto assets are covered or what conditions would govern self-custody and state trust company custody. It does not describe when firms would have to comply. Those gaps are features of a short press release, not proof that the proposing release is silent on them. Until that text, public comments, and any later action are available, conclusions about investor protection or product availability would outrun this record.

What Can Be Said, and What Cannot

The reported record is limited. On October 1, 2026, the Commission proposed a tailored custody framework for crypto assets of registered investment advisers and of regulated funds, meaning registered investment companies and business development companies. As described in the press release, the proposal would update requirements that include financial statement audits for advisers and broker-dealer custodial services for regulated funds, permit self-custody of crypto assets under circumstances that are not defined here, and allow state trust companies to custody client and fund crypto assets. Comments would be open for 60 days after Federal Register publication.

One analytical reading is that the Commission is treating custody, rather than a new trading venue or a new asset definition, as the immediate issue for advisers and funds that want to offer crypto-related advice and strategies. That reading follows only from what the release emphasizes. It does not establish that barriers will be removed, that fund menus will widen, or that safeguards will be stronger or weaker. Those results depend on rule text and later Commission action that this announcement does not provide. The firm conclusion available now is procedural: a proposal is public, the comment period has no fixed end date in this release, and the conditions that would govern actual custody of crypto assets remain incompletely specified here.

Source

U.S. Securities and Exchange Commission published this record on 2026-10-01. Pennington Financial accessed it on 2026-10-09.