SEC Crypto Custody Rule Overhaul Heads to White House for Review

The U.S. Securities and Exchange Commission has submitted its proposed "Amendments to the Custody Rules" to the White House Office of Information and Regulatory Affairs (OIRA) for review on August 25, marking a key step in reshaping how investment advisers and funds hold digital assets for clients. According to the SEC's regulatory agenda, the changes target existing rules under the Investment Advisers Act and Investment Company Act, with the goal of clarifying compliance requirements for institutions safeguarding crypto on behalf of clients. The proposal has not been made public, and OIRA may request modifications before returning it to the SEC for a commissioner vote and potential public comment period.

The overhaul comes as part of Chair Paul Atkins' broader pivot away from enforcement-driven crypto regulation toward formal rulemaking, a strategy he has pursued since taking the helm in 2025. Under Atkins, the SEC has dropped several high-profile cases against major crypto firms, including its lawsuit against Coinbase, signaling a more industry-friendly posture. The custody reform also aligns with the Trump administration's digital asset agenda, arriving as the CLARITY market structure bill faces a cloture vote in the Senate following the August recess.

Industry observers note that clearer custody standards could unlock institutional participation by removing legal ambiguity around how funds store client tokens in compliance with federal securities laws. Meanwhile, the Commodity Futures Trading Commission has followed the SEC's lead in scrapping its own 'no-deny' policy for settlements, reflecting a coordinated shift in U.S. regulatory tone. The SEC's upcoming proposal will likely draw significant comment from asset managers, custodians, and crypto-native firms once released.