The US Securities and Exchange Commission has sent its planned overhaul of crypto custody rules to the White House for review, advancing changes that could clarify how investment advisers and funds hold digital assets for clients.
The proposal reached the Office of Management and Budget's regulatory review arm on Aug. 25. It has not been made public, and the OMB can request changes before returning it to the SEC, where commissioners would then vote on whether to release it for public comment.
Reviving a Failed Rulemaking
The effort resurrects one of the most contested crypto rulemakings of the previous administration. In 2023, the SEC under Gary Gensler proposed narrowly restricting the places investment advisers could park clients' crypto assets — a "qualified custodian" rule that industry groups argued would push funds toward a handful of banks and away from the specialized custodians that dominate the market. That version was never finalized and effectively died.
The new approach remains shrouded in secrecy, but the SEC is considering changes to existing rules or entirely new rules under the Investment Advisers Act and the Investment Company Act — the two statutes governing how fiduciaries safeguard client assets.
The custody push is part of a broader shift toward formal crypto rulemaking under Chair Paul Atkins, alongside a retreat from the enforcement-heavy approach of previous years. Atkins has repeatedly framed tokenization and institutional-grade custody infrastructure as priorities for capital markets.
The Clock in the Senate
The timing is politically charged. The White House is pressing its digital asset agenda while the CLARITY market structure bill remains stalled in the Senate ahead of a potential September cloture vote. A finalized custody rule would deliver part of what CLARITY's supporters want through regulation rather than legislation.
For advisers and funds, the stakes are concrete: clear custody rules would make it easier to hold bitcoin, ether, and tokenized securities for clients without legal ambiguity — widely viewed as a prerequisite for the next wave of institutional allocation. The OMB review typically takes 30 to 90 days, meaning a public proposal could land before the end of the year.