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The U.S. Securities and Exchange Commission has proposed a tailored federal custody framework for crypto assets held by registered investment advisers and regulated funds. The proposal would amend custody requirements under the Investment Advisers Act and Investment Company Act, creating conditional routes for advisers and funds to use state trust companies as crypto custodians and, where no qualified custodian is available, for advisers to self-custody certain client crypto assets. It also addresses adviser financial-statement audits and broker-dealer custodial services.
Self-custody under proposed Release IA-7023 would require documented due diligence, private-key protections, multi-person transaction controls, segregated on-chain addresses, annual cybersecurity reviews, independent accountant reporting, and quarterly client statements. The SEC said native bitcoin, ether, and SOL are generally outside the existing adviser custody rule for non-fund clients, while regulated funds may face broader obligations. The measures remain proposed rules, with public comments due within 60 days after publication in the Federal Register.
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The SEC proposed Release IA-7023 to create crypto-specific custody options for registered investment advisers and regulated funds, including conditional self-custody when no qualified custodian is available and a route for state trust companies to act as custodians. The proposal includes safeguarding, cybersecurity, reporting, segregation, and due-diligence requirements and is subject to public comment after Federal Register publication.
An SEC staff letter conditionally allowed advisers and funds to treat certain state trust companies as banks without an SEC staff enforcement recommendation. The relief did not change the underlying law.
The SEC withdrew its 2023 safeguarding proposal, which would have expanded the investment-adviser custody rule to all client assets, including crypto assets that were neither funds nor securities.
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The U.K. Financial Conduct Authority (FCA) has initiated three major consultations to establish a comprehensive regulatory framework for crypto asset activities and markets, aiming for full implementation by 2027. The proposed regulations will bring crypto assets, including stablecoins and qualifying digital assets, under oversight similar to that of traditional financial services, with a focus on consumer protection and market integrity. Key elements of the FCA's proposals include subjecting crypto trading platforms, intermediaries, staking providers, and decentralized finance (DeFi) firms to new conduct, disclosure, and prudential rules. The framework also introduces a standalone market abuse regime, stricter admission and disclosure requirements, and enhanced prudential standards to mitigate risks associated with weak financial reserves and potential firm failures. Legal experts have characterized this regulatory initiative as a significant milestone for the U.K. crypto sector.
Jun 29, 2026
The U.S. Securities and Exchange Commission has proposed modernized rules for registered transfer agents that explicitly address electronic and blockchain-based securities records. The proposal would update requirements for record retention, risk management, business continuity, safeguarding, and compliance, applying to traditional transfer agents as well as registered tokenization firms and issuers maintaining tokenized securities. The SEC identifies distributed-ledger data integrity, tokenized-security protection, and blockchain operating models as material operational risks requiring controls. The proposal follows SEC staff guidance issued in May 2025 that permitted transfer agents to use distributed-ledger technology for official master securityholder files when federal securities requirements are met; the rules are not yet effective and will be open for public comment for 60 days after publication in the Federal Register.
Sep 2, 2026
The **U.S. Securities and Exchange Commission**, working with the **CFTC**, issued interpretive guidance that for the first time lays out a formal taxonomy for crypto assets and states that **most crypto assets are not themselves securities**. The guidance creates four categories that fall outside federal securities laws—**digital commodities, digital collectibles, digital tools, and payment stablecoins**—while reserving securities treatment for **digital securities**, defined as tokenized versions of traditional instruments such as stocks and bonds. The interpretation also clarifies how the **Howey test** applies when a crypto asset is part of an investment contract, marking a significant shift from the prior SEC approach under Gary Gensler, which had been criticized for relying on enforcement rather than clear rulemaking. The new framework was presented as an interim regulatory step while Congress continues work on broader market-structure legislation, including the **CLARITY Act**, and reflects the more coordinated posture between the SEC and CFTC under Chairman **Paul Atkins**. Supporters said the guidance is intended to reduce legal uncertainty for issuers, exchanges, and investors, and to return the SEC to policing actual securities transactions rather than treating broad swaths of the crypto market as securities by default. One reference is an opinion piece advocating for the same policy change and reinforcing the agency's rationale, while the other cited articles concern separate issues—including U.K. political donations, an Iran-linked exchange, allegations involving Binance, and Senate negotiations on crypto legislation—and are not part of this specific regulatory action.
Jul 12, 2026