SEC Sends Crypto Custody Rule Overhaul to White House for Review

The Securities and Exchange Commission has sent a proposal overhauling how investment advisers and funds custody digital assets to the White House Office of Information and Regulatory Affairs.

The rulemaking, filed under RIN 3235-AN46 on the Reginfo.gov regulatory agenda, landed at OIRA on Aug. 25, Cointelegraph reported. OIRA sits inside the Office of Management and Budget. It is the gatekeeper federal agencies must clear before a major rule can move toward public comment.

In practice, the custody text is not yet public. It could be altered before investors ever see it.

The SEC’s own description, carried by Bitcoin Magazine, says the rulemaking “would clarify the framework for the custody of crypto assets for investment adviser and investment companies, as well as make other modernizations needed to remove burdens from certain outdated provisions that are no longer needed to provide investor protection given the evolution in the markets and security trading and holding practices.” The amendments would sit under the Investment Advisers Act and the Investment Company Act. Those two statutes govern who can hold client assets and how.

OIRA can request changes before sending the proposal back to the SEC. The commission would then vote on whether to release it for public comment. No timeline for either step has been set. Whether the rule replaces or amends the SEC’s earlier 2023 custody proposal remains unclear.

The filing arrives as the parallel legislative route stalls. A Senate vote on the CLARITY market structure bill slipped to September after Democrats objected to the latest draft, Bitcoin Magazine reported. Pro-crypto lawmakers had hoped to pass it before the August recess. Senator Cynthia Lummis was among Republican senators who accused counterparts of deliberately holding the bill back.

SEC Chair Paul Atkins took the post in 2025 on a pledge to end what he called “regulation through enforcement.” He said he is “committed to supporting Congress in advancing” the Clarity Act, Bitcoin Magazine reported. Earlier in the year the SEC dismissed several cases against major crypto companies, including its lawsuit against Coinbase, Cointelegraph reported. Earlier this month the agency proposed a separate framework to let token issuers raise money in the U.S. without triggering securities laws.

The executive branch is not waiting on Congress. CFTC Chairman Michael Selig said he will proceed with rulemaking whether or not the Clarity Act is enacted. The aim: finalize rules before the administration’s term is out, Bitcoin Magazine reported. President Donald Trump last week urged lawmakers to get the Clarity Act passed.

What the custody proposal would change in practice depends on text the SEC has not released. For now, advisers and funds holding digital assets for clients operate under custody rules written for a pre-crypto market. That part may be about to change.