SEC resurrecting U.S. crypto custody rule the previous administration failed to land - CoinDesk

The SEC is reportedly revisiting a custody rule specifically tailored to digital assets—a measure that previously stalled during the prior administration. Such a rule would likely mandate that registered investment advisers place client cryptocurrency holdings with a qualified custodian, addressing long-standing ambiguity about how these assets are safeguarded. The revival signals that regulators are aiming to close gaps in investor protection as crypto becomes more integrated into mainstream portfolios.

For market participants, the significance lies in the potential for clearer operational standards. If finalized, the rule could force custodians to meet stricter segregation and reporting requirements, potentially raising compliance costs. At the same time, it might encourage institutional participation by reducing the legal uncertainty that has discouraged some traditional firms. Investors may see this as a step toward legitimizing crypto as an allocatable asset class.

What to watch includes the rule’s scope—whether it covers all digital assets or only certain tokens—and how it interacts with existing SEC guidance on broker-dealer custody. The outcome could reshape competitive dynamics among custody providers, but the timeline remains uncertain. A revived proposal does not guarantee a final rule, and revisions are likely during the comment process.