SEC on October 1, 2026 proposed separate crypto asset custody rules for investment advisers and regulated funds

This is only a proposal for now: final rules will appear after public comments. The goal is for advisers and funds to be able to lawfully hold crypto with permitted custodians, among which, according to Commissioner Peirce, will be state trust companies. For an ordinary holder this requires no direct action.

Facts

Commissioner Peirce notes: traditional custodians have few developed services for a broad range of crypto assets, partly because of prior SEC actions and statements.
According to Peirce, state trust companies will be able to be eligible custodians if the adviser or fund has reasonably verified their license to custody crypto and the existence of policies protecting against theft and loss, and verifies this annually.
The rules will cover only crypto assets that are money or securities; for funds under the investment company law, only securities or similar investments.
Peirce urged market participants to read the lengthy proposal and answer the Commission questions, and also stated that regulators should protect the right to self custody. [sec.gov, October 1, 2026]
The SEC stated that it proposed new rules and amendments with an adapted crypto asset custody framework for registered investment advisers, investment companies and business development companies (BDC). [@SECGov, October 1, 2026]

Awaiting

What changes will be included in the final rules after public comments.

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