SEC Custody Proposal Moves to White House
The SEC has forwarded its crypto custody rule modernization to the White House for review, according to multiple reports. The proposal aims to clarify where investment advisers and funds may hold digital assets on behalf of clients—an area left largely unresolved after the regulator's 2023 attempt to narrowly restrict custody arrangements.
The custody framework has become a central point of regulatory focus as institutional participation in crypto markets grows. By establishing clearer rules, the SEC intends to reduce legal ambiguity around the handling of digital assets by regulated financial firms. The specifics of the proposed approach remain under wraps as the proposal undergoes White House review.
Broader Regulatory Landscape and Congressional Stalemate
The SEC's custody initiative represents one of the few concrete regulatory steps advancing despite a stalled vote on the Clarity Act in Congress. Rather than waiting for legislative action, the regulator is proceeding with administrative rulemaking to address what it views as urgent gaps in crypto asset oversight.
The SEC has also indicated it is developing broader 'regulation crypto assets' proposals that could affect initial coin offerings and token classification. However, regulatory observers note that certain tokens may remain in ambiguous territory between securities and non-securities classification, potentially limiting the scope of any clarification the new rules provide.
