SEC Sends Crypto Custody Rule to White House for Review
The SEC has submitted a revised crypto custody proposal to the White House Office of Management and Budget, covering investment advisers and investment companies. The rule replaces a 2023 proposal and enters a standard 30-to-60-day review window, though key enforcement details remain undisclosed.
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Story Updates
- Updated Aug 28, 2026, 02:01 AM: OMB review timeline clarified; banks and state trust companies confirmed as covered entities; key rule details remain undisclosed.
Proposal Enters White House Review
The SEC submitted its revised crypto custody proposal to the White House Office of Management and Budget, a required procedural step before the rule can be finalized and published in the Federal Register. The proposal applies to investment advisers, investment companies, banks, and state trust companies holding digital assets on behalf of clients. The OMB review typically takes 30 to 60 days, though reviews of complex financial regulations often extend beyond that window. October was mentioned as a target completion date, but no firm deadline has been set.
What Remains Unclear
The SEC has not publicly disclosed the specific language or enforcement requirements in the revised proposal, making it difficult for custody providers and institutional asset managers to prepare for compliance. The new version is designed to clarify how digital-asset custody should function across investment firms, but the detailed technical and operational standards remain under wraps pending OMB clearance.
Departure from 2023 Withdrawn Rule
This custody framework replaces a separate 2023 proposal that the SEC withdrew without publishing final language. The agency has similarly kept the reasoning behind that withdrawal private. Industry observers are watching closely to see whether the updated rule addresses concerns that prompted the earlier withdrawal, or whether it takes a substantially different regulatory approach.
Why It Matters
For Traders
Custody rule clarity could shift institutional order flow between compliant and non-compliant venues, but lack of disclosed details limits near-term trading signals.
For Investors
A finalized standard may accelerate institutional adoption by reducing regulatory uncertainty, though the October target remains fluid and subject to OMB extension.
For Builders
Custody infrastructure providers cannot finalize compliance builds without seeing the rule's technical requirements; the undisclosed language creates material planning risk.
This article is for information only and is not financial advice. Read the full disclaimer.
