SEC Proposes Overhaul of Advisers Act Custody Rule for Crypto Assets
The SEC's October 1, 2026 proposal would substantially rewrite the registered investment adviser custody rule and amend the Investment Company Act to address digital assets, reshaping how advisers safeguard client crypto holdings.
On October 1, 2026 the SEC proposed rules and amendments under the Investment Advisers Act of 1940 and the Investment Company Act of 1940 that would materially revise the adviser custody framework as applied to digital assets. Reporting indicates the proposal makes sweeping changes to the existing custody rule — the requirement that advisers holding client securities maintain them with a qualified custodian in a segregated account subject to reasonable verification.
Several obligations intersect here: which custodians qualify, how client property is held and verified, and how advisers address assets for which a qualified custodian may not exist. Comment deadlines, transition periods and any grandfathering are the operative details to extract from the releasing text, which is not in the available source material.
Asset managers, private funds, brokers and fintech clients should map current custody arrangements against the proposal, flag self-custody or offshore positions, and prepare comment submissions. Watch the final rule's treatment of custodian eligibility, safekeeping of staking or on-chain instruments, recordkeeping expectations, and any industry challenge. This rests on a single secondary summary; check the Commission's own release.