Key Highlights
- The Securities and Exchange Commission submitted revised crypto custody guidelines to the White House OMB for federal review
- The revision seeks to establish clear parameters for investment advisers and funds managing digital asset holdings on behalf of clients
- Details of the proposal remain confidential and may undergo modifications during the review process
- Chair Paul Atkins has redirected the agency toward structured rulemaking instead of enforcement-based regulation since assuming leadership in 2025
- This development occurs while the CLARITY legislation faces delays in the Senate
The Securities and Exchange Commission is advancing its initiative to establish comprehensive guidelines governing cryptocurrency custody practices by investment advisers. On August 25, the agency forwarded its proposal to the Office of Information and Regulatory Affairs within the White House Office of Management and Budget, marking a critical step in the regulatory process.
According to the commission, investment advisers have submitted numerous inquiries regarding compliant methods for holding cryptocurrency assets under current regulatory frameworks. This proposed rulemaking represents the agency’s response to those concerns.
In its submission, the SEC characterized the initiative as an effort to “clarify the framework for the custody of crypto assets for investment advisers and investment companies.” The proposal would additionally eliminate obsolete regulatory provisions that the commission deems unnecessary.
The full text of the proposal remains under wraps. During the OMB review period, the budget office may recommend revisions before returning the document to the SEC. Following that process, commissioners would determine whether to publish the proposal for public feedback.
Regulatory Philosophy Transformation Under Atkins
Since Paul Atkins assumed the chairmanship in 2025, the SEC has adopted a markedly different approach toward digital asset oversight. Atkins committed to abandoning the controversial “regulation through enforcement” strategy in favor of transparent, formal rulemaking processes.
Throughout 2025, the commission withdrew multiple enforcement actions against prominent crypto companies, notably dismissing its litigation against Coinbase. The agency also published guidance determining that memecoins fall outside securities classification and outlined which staking operations aren’t subject to securities regulations.
Just days ago, the SEC unveiled “Regulation Crypto Assets,” characterized as a customized framework designed to facilitate capital formation while maintaining investor safeguards. This initiative complemented earlier joint guidance issued with the Commodity Futures Trading Commission.
Atkins has additionally announced intentions to establish an innovation exemption pathway to expedite approval for cryptocurrency products, though specific details of that framework remain forthcoming.
Legislative Status of the CLARITY Act
This custody rulemaking initiative unfolds against the backdrop of the stagnant CLARITY market structure legislation in the Senate. Observers anticipate a cloture vote on the measure when Congress reconvenes following the August recess in September.
According to Bloomberg’s analysis, the custody proposal represents one component of the SEC’s broader strategy to implement the Trump administration’s digital asset policy objectives amid sluggish legislative progress on Capitol Hill.
Following White House review, the custody framework will return to the SEC for consideration. At that juncture, commissioners will vote on whether to publish the proposal for public comment, initiating a formal period during which industry stakeholders and interested parties can submit feedback.
The commission has not announced a specific timeframe for the anticipated vote.
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