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The U.S. Securities and Exchange Commission has sent its proposed overhaul of crypto custody rules to the White House, with the package landing at the Office of Information and Regulatory Affairs on August 25 ahead of a planned formal release in October. The filing, titled "Amendments to the Custody Rules," was posted to Reginfo.gov and carries two labels that telegraph the agency's direction: it is classified as economically significant, meaning an expected annual economic impact of at least $100 million, and it sits in the deregulatory column under President Donald Trump's Executive Order 14192, which requires agencies to scrap ten rules for every new one they write. The SEC is considering changes to existing rules or new ones under the Investment Advisers Act and Investment Company Act "to improve and modernize the regulations around the custody of advisory client and fund assets, including to address in each case crypto assets."

The current framework forces investment advisers to park client assets with a qualified custodian, typically a bank or broker-dealer, institutions that have historically been unwilling to hold crypto. The agency withdrew a 2023 Safeguarding Rule proposed under former Chair Gary Gensler in June 2025. Since then, industry voices including Andreessen Horowitz have petitioned the SEC to modernize the regime, and in December 2025 lawyers from Delphi Ventures and Multicoin Capital submitted a custody framework that asks for explicit room to use multi-signature and multi-party computation wallets, tools that split key control so no single party can move the assets.

Chair Paul Atkins, who took the helm in 2025, has moved the agency away from what he has called "regulation through enforcement" and toward formal rulemaking. The SEC dismissed several crypto cases in 2025, including its lawsuit against Coinbase. The custody filing comes one week after the SEC proposed Regulation Crypto Assets, a fundraising regime for tokens; together the two packages would cover both ends of the market, setting how projects raise capital and how institutions hold it. "As we continue the Commission's efforts to provide clarity for crypto markets, and as Congress works to establish a lasting regulatory framework, Regulation Crypto Assets seeks to provide … clear pathways to raise capital under the federal securities laws," Atkins said in an August 18 statement.

The Commodity Futures Trading Commission moved in parallel, sending its own proposed rules, "Regulation Crypto Asset Transactions" and "Regulation Crypto Asset Markets," to the Office of Management and Budget, covering transactions and a market framework within the CFTC's jurisdiction. CFTC Chair Mike Selig had signaled the agency would advance its crypto agenda regardless of congressional action, and on August 21 the Commission issued a no-action position stating it would not recommend enforcement action against crypto developers who facilitate trades in derivative products if they do not register as introducing brokers, subject to certain conditions. The CFTC separately scrapped its prior "no-deny" policy for settlements.

On Capitol Hill, the Clarity Act, which would split oversight between the SEC and the CFTC, passed the House 294-134 in July 2025 and now faces a 60-vote cloture test around September 15 after senators return from the August recess. Until a vote is held, both commissions are keeping their pens moving, and custody, which once looked like the bottleneck for institutional crypto, is now the rule Washington is racing to rewrite.