SEC Sends Crypto Custody Rule to White House for Review
The SEC has submitted a proposed overhaul of crypto custody rules for investment advisers and investment companies to the White House Office of Management and Budget for review. The new proposal replaces a 2023 rule that the agency withdrew, aiming to clarify digital-asset custody standards.
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Proposal Path Forward
The SEC sent its revised crypto custody proposal to the White House Office of Management and Budget, a standard review step before a rule can be finalized and published in the Federal Register. The proposal applies to investment advisers and investment companies holding digital assets on behalf of clients, establishing clearer custody standards across the sector.
What Changed From 2023
The current proposal represents a departure from a separate 2023 custody rule that the SEC withdrew. The agency did not publicly disclose details of the withdrawn proposal's specific language, but the new version is designed to clarify how digital-asset custody should function across investment firms. The OMB review typically takes 30 to 60 days, though it can extend longer for complex financial regulations.
Why It Matters
For Traders
Clearer custody rules may reduce uncertainty around which exchanges and custodians can safely service institutional investors, potentially shifting volume.
For Investors
A finalized custody standard would lower regulatory risk for institutional crypto allocations and may accelerate inflows from traditional asset managers.
For Builders
Custody infrastructure providers need to track this rule's final language closely, as compliance costs and technical requirements will depend on how the SEC defines custody obligations.
This article is for information only and is not financial advice. Read the full disclaimer.
