On October 1, 2026, the SEC proposed rules giving registered investment advisers and regulated funds a defined path to custody crypto assets.
Central change: conditional self-custody. Advisers may hold client crypto only after written determination that no qualified custodian will maintain the asset, only while that remains true, and only if adviser alone possesses keys.
State trust companies become qualified custodians under Rule 223-1 and permitted custodians under new Investment Company Act Rule 17f-8 for crypto and related cash equivalents. No federal “bank” determination required.
Self-custody conditions include quarterly reassessment, documented safeguarding expertise, private-key controls, two-person transfer authorization, cybersecurity reviews, independent control reports, and quarterly client statements.
Separate amendments modernize custody rules for non-crypto assets. No transition period proposed; Commission asks whether more time needed.
Release Nos. IA-7023; IC-36353; File No. S7-2026-35.