Reg Wrap: SEC proposes new crypto custody rules - thebanker.com

The U.S. Securities and Exchange Commission has proposed new rules governing how crypto assets are held in custody. The proposal, reported by *The Banker*, signals a formal step toward bringing digital-asset safekeeping under the existing regulatory framework that already applies to traditional securities.

For the market, the core question is who may hold customer crypto — and under what standards. Custody rules typically address segregation of client assets, recordkeeping, and safeguards against commingling or loss. If adopted, such requirements could reshape the operating models of exchanges, brokers, and specialist custodians, potentially raising compliance costs while offering institutional investors clearer legal footing.

The proposal is not yet final. It will likely move through a public comment period, during which industry participants can raise concerns about scope and practicality, and its eventual form may differ from the initial draft. What to watch: the final rule's definition of covered assets, whether existing custodians must restructure, and how the framework interacts with other regulators' oversight. For now, the development is best read as a directional signal — regulators are moving to formalize crypto custody rather than leave it in a grey area.