Update: SEC crypto custody plan would allow adviser self-custody under conditions
Oct. 1, 2026 — This updates our Oct. 1 report on the SEC's proposed custody rules for crypto assets. The proposal, laid out in the SEC's release and fact sheet, would let registered investment advisers and regulated funds hold crypto assets themselves when no qualified custodian is available for a given asset, a determination they would have to revisit every quarter. Self-custody would come with conditions: documented safeguarding expertise, private-key management requiring two people to authorize transactions, a separate crypto address for each client, an independent accountant's internal-control report within six months and yearly after that, and account statements at least quarterly.
The proposal would also let advisers and funds use state-chartered trust companies as crypto custodians, after due inquiry into the company's state authorization, audited financial statements and controls, with client assets kept apart from the company's own. The SEC says permitted custodians may not be available for some crypto assets today.
A fund's board would have to review the adviser's no-custodian finding quarterly. Records kept on a crypto network could satisfy recordkeeping rules, with conditions.
Chairman Paul Atkins said the current custody rules were crafted "for a bygone era." Comments are due 60 days after the proposal is published in the Federal Register.
The wall: When the comment period starts depends on Federal Register publication, which had not occurred as of Oct. 4; which state trust companies would qualify is not listed.
Tier: Confirmed (based on the SEC's release and fact sheet, not the full proposing release)
Sources
- Securities and Exchange Commission, SEC Proposal Would Address How Investment Advisers and Funds Can Custody Crypto Assets (2026-100, Oct. 1, 2026)
- Securities and Exchange Commission, Fact Sheet: Investment Adviser and Regulated Fund Custody Rules; Crypto Custody Rules (Oct. 1, 2026)
- Securities and Exchange Commission, Chairman Paul S. Atkins, statement on the custody proposal (Oct. 1, 2026)
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