SEC Proposes Letting Advisers and Funds Hold Client Crypto When No Custodian Can

The 760-page proposal would also let state trust companies act as crypto custodians, with public comments open for 60 days after it is published in the Federal Register.

SEC proposes crypto custody workaround for advisers

Posted October 2, 2026 at 5:41 am ET.

The Securities and Exchange Commission proposed rules on Thursday that would let registered investment advisers and regulated funds hold client crypto themselves when no approved custodian can, and would allow state trust companies to safeguard those assets.

SEC Chairman Paul Atkins said in a statement that the plan is meant “to close a gap that has left investment advisers and funds guessing how to effect lawful custody of an asset class that their clients increasingly demand.”

Current rules generally require advisers to keep client assets with a qualified custodian, such as a bank or a registered broker-dealer. Atkins said that “with newly developed crypto assets, custodial capabilities may lag an asset’s deployment by many months.”

How Self-Custody Would Work

An adviser could hold a client’s crypto only after concluding that no permitted custodian is available, and it would have to recheck that every quarter, according to the SEC’s fact sheet. It would also need documented expertise for each asset, private key controls requiring at least two people to approve any transaction, separate addresses for each client and outside accountant reports on its controls. Clients would get account statements at least quarterly.