White House Receives SEC's Revamped Cryptocurrency Custody Regulations for Assessment
A comprehensive revision of custody regulations by the securities watchdog may provide clarity for investment advisers and funds on managing digital assets for their clients as it undergoes administrative review.
The United States Securities and Exchange Commission (SEC) is advancing its initiative to revamp custody regulations applicable to investment advisers and investment companies, a move that could provide institutions with enhanced clarity regarding the management of cryptocurrency assets for their clients in accordance with federal securities regulations.
On Aug. 25, the proposed regulation was submitted to the Office of Information and Regulatory Affairs (OIRA), a division within the White House Office of Management and Budget, for examination before returning to the SEC for potential public comment release.
Based on the SEC's regulatory agenda, the commission is evaluating modifications to current regulations or the introduction of new provisions under the Investment Advisers Act and Investment Company Act. These amendments would address the protocols for how investment advisers and funds maintain custody of client assets, with digital currencies included in the scope.
According to the regulator, these amendments aim to eliminate ambiguity surrounding the methods by which firms can safeguard crypto assets on behalf of clients while maintaining compliance with its regulatory framework. The proposal remains confidential at this stage, and the White House Office of Management and Budget retains the authority to recommend modifications before returning it to the SEC. Following this, the commission would conduct a vote to determine whether to open it for public commentary.
Bloomberg's reporting indicates that the proposed regulation represents a component of the agency's extensive effort to promote the Trump administration's digital asset policy objectives while the CLARITY market structure bill continues to face delays in the Senate. The legislation is anticipated to undergo a cloture vote following lawmakers' return from the August recess in September.
SEC shifts from crypto enforcement to rulemaking
Since Paul Atkins assumed the chairmanship in 2025, the SEC has adopted a more accommodating stance toward cryptocurrency, transitioning its emphasis from enforcement measures to the establishment of more transparent industry regulations. Atkins pledged to discontinue the agency's former "regulation through enforcement" methodology and stated that policy development should be conducted through official rulemaking procedures instead.
This transformation has been evident in the agency's enforcement activities as well. In 2025, the SEC withdrew multiple cases against prominent cryptocurrency firms, including its legal action against Coinbase, reflecting its effort to recalibrate its strategy toward digital assets.