The US Securities and Exchange Commission has proposed new rules for how registered investment advisers and regulated investment companies hold crypto assets, reopening a policy question that affects asset managers, custodians and investors.
Announced on 1 October 2026, the proposal would create a framework tailored to the technical features of crypto rather than trying to fit every arrangement into rules written for conventional securities. It is not yet a final rule. The SEC said public comments would be due 60 days after publication in the Federal Register.
What problem is the SEC trying to solve?
Custody rules are designed to reduce the risk that a client’s assets are lost, misused or mixed with a firm’s own property. Crypto complicates that task because control can depend on cryptographic keys, transactions may be irreversible and the legal role of a platform or wallet provider is not always equivalent to that of a traditional bank or broker.
The proposal seeks to define how advisers and funds can demonstrate that assets are properly safeguarded when the underlying system works differently from a conventional securities account.
Would self-custody be allowed?
Yes, in limited circumstances. According to the SEC’s announcement, the proposed framework would permit certain advisers and funds to self-custody crypto assets when specified conditions are met. That could be significant for organisations that believe direct control of keys is safer or operationally necessary.
Self-custody would not mean an absence of controls. A workable arrangement still needs documented responsibility, secure key management, recovery planning and records that allow auditors and regulators to establish who controls an asset. The detailed proposing release, rather than the press announcement alone, is the place to assess those conditions.
Which outside custodians could qualify?
The commission said the proposal addresses the role of state trust companies as well as other entities that may act as qualified custodians. This is an important market-structure question because legal labels vary between states and do not always indicate the same level of supervision, capital or operational resilience.
Asset managers will want to examine the proposed eligibility tests, contractual requirements and record-keeping duties before assuming that an existing provider will qualify. The proposal starts a consultation; it does not confer blanket approval on any named company or category.
Why does this matter to ordinary investors?
Custody is the quiet infrastructure behind an investment product. If it fails, the consequences can include frozen withdrawals, disputed ownership or losses that are difficult to reverse. Clearer rules could make responsibilities easier to understand, but compliance costs may also affect which services advisers are willing to offer.
For investors, the useful questions are practical: who controls the keys, how assets are separated, what happens if a custodian fails and whether account statements can be reconciled with on-chain records. A regulatory framework is valuable only if it improves answers to those questions.
What happens before any rule takes effect?
The SEC will receive public comments and may revise the text before voting on a final rule. Comment periods often surface technical problems, competing cost estimates and unintended effects that are not obvious at proposal stage.
Firms should therefore treat the announcement as a direction of travel, not a compliance deadline. The final requirements, effective date and any transition period may differ from the proposal. Readers should also distinguish federal investment-adviser rules from separate banking, commodities, state and consumer-protection requirements.
Reporting basis
This article is based on the SEC’s 1 October 2026 announcement. The SEC page links to the full proposing release and public-comment materials. Ferdiox has described the proposal in neutral terms; nothing here is legal or investment advice.
Featured image: Jievani Weerasinghe via Unsplash.