SEC Sends Crypto Custody Proposal to White House

The update

The U.S. Securities and Exchange Commission (SEC) has sent a proposal to the White House Office of Management and Budget to amend existing custody rules. The move aims to clarify how investment advisers and companies can hold crypto assets for clients while complying with federal securities laws. The proposal, titled “Amendments to the Custody Rules,” addresses uncertainty around holding digital assets and seeks to remove burdens from outdated provisions.

Why it matters

This shift represents a move away from the SEC’s previous “regulation through enforcement” approach. Under the new proposal, the agency is focusing on formal rulemaking to provide clearer guidance for the industry. The changes could allow investment firms to hold digital assets for clients with greater certainty, potentially increasing institutional participation in the crypto market.

What to watch

The White House Office of Management and Budget will review the proposal before it is sent back to the SEC for a vote on releasing it for public comment. The timeline for implementation depends on this review process. The broader regulatory landscape may shift further if the SEC continues to prioritize rulemaking over enforcement actions.

Sources

• bitcoinmagazine.com — Context on the proposal's intent to clarify custody frameworks and modernize regulations.
• cointelegraph.com — Details on the submission to the Office of Information and Regulatory Affairs and the SEC's shift in strategy.