SEC Sends Proposal to White House to Overhaul Crypto Custody Rules for Investment Firms - CoinGape

The SEC has formally submitted its long-awaited proposal to overhaul custody rules for investment firms to the White House Office of Management and Budget (OMB) for review. This procedural step signals that the rulemaking process is advancing toward publication, after which the public and industry will have a chance to comment on the specifics. At the core of the proposal is an effort to update decades-old custody guidance to account for the unique characteristics of digital assets, including how private keys are held and what qualifies as “possession or control” of a client’s crypto.

For the broader market, this development matters because clearer custody standards are widely seen as a precondition for institutional capital to enter the crypto space. Currently, investment advisers face uncertainty about whether their existing custodial arrangements—such as using qualified custodians with novel crypto-specific practices—meet SEC compliance thresholds. A revised framework could lower barriers by providing explicit safeguards, potentially affecting everything from fee structures to the types of custodians that can legally serve U.S. advisers. However, the exact contours of the rule remain unknown until formal publication.

Investors and industry watchers should track two things: the release of the proposed text and the subsequent comment period, as any shift in custody requirements will likely influence how advisers structure their digital asset offerings. The OMB review is a technical but meaningful checkpoint, indicating that regulatory clarity is one step closer—though the final outcome may take many months to conclude.