The U.S. Securities and Exchange Commission has advanced a proposal that would change the rules governing how investment advisers hold digital assets, sending it to the White House for review this week, according to a report from The Block.
The review is being handled by the Office of Information and Regulatory Affairs, a division of the Office of Management and Budget that examines federal regulations before they are published. According to OIRA's website, the office is reviewing changes to the SEC's custody rules. This step is a standard part of the federal rulemaking process and generally precedes the formal release of a proposed rule for public comment. It does not, by itself, indicate what the final rule will contain or when it will be issued.
The SEC has indicated that the rulemaking is a response to questions it received from investment advisers about how they can hold crypto assets on behalf of clients while still complying with the agency's existing requirements. In describing the effort, the agency said it would "clarify the framework for the custody of crypto assets for investment adviser and investment companies," alongside other modernizations intended to remove provisions the agency views as outdated given changes in market and trading practices.
Custody has been a persistent point of friction between registered investment advisers and digital asset markets. Advisers registered with the SEC are subject to rules that dictate where and how client assets must be held, and those requirements were written with traditional securities and cash in mind rather than blockchain-based assets held via private keys or through specialized custodians. Firms have argued for years that the mismatch creates compliance uncertainty. The scope of any changes will only become clear once the proposal itself is published.
Bloomberg first reported that the proposal had been sent for review.
The custody submission follows a broader push at the agency. Last week, the SEC put forward a proposal it calls "Regulation Crypto Assets," described as a tailored offering regime meant to help projects raise capital while maintaining investor protections. CoinDesk reported that the SEC opened a 60-day public comment period on that proposal, after which the agency can work toward a final rule in the months ahead. Reg Crypto builds on guidance issued in March by the SEC and the Commodity Futures Trading Commission that addressed how federal securities laws apply to digital assets and related transactions.
The regulatory activity is unfolding against an unsettled legislative backdrop. The Digital Asset Market Clarity Act remains pending in the Senate, and SEC Chairman Paul Atkins has framed rulemaking as complementary to, rather than a substitute for, congressional action, saying that "legislation remains indispensable to enacting 'future-proofed' rules of the road" durable enough to survive future regulators. CFTC Chairman Mike Selig has separately indicated his agency is prepared to begin its own rulemaking if the Clarity Act does not become law.
Industry reaction to the SEC's recent proposals has been broadly receptive, though observers have noted that timing is a significant open question. Rulemaking of this kind typically requires the agency to review public comments, draft a final rule, and then allow firms a compliance period before requirements take effect.
For now, several details remain unknown publicly, including the specific text of the custody proposal, how long OIRA's review will take, and what conditions the SEC may attach to qualifying custodians. Readers should treat the current stage as procedural. Nothing about a rule reaching White House review determines whether it will be adopted, in what form, or what effect it may have on markets.
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Source: The Block · 2026-08-29
