SEC Sends Crypto Custody Proposal to White House as Bitcoin Holds $77.9K

SEC Custody Overhaul Reaches White House

The U.S. Securities and Exchange Commission has submitted its long-awaited amendments to the custody rules to the White House Office of Management and Budget, a move that could reshape how investment advisers and funds hold crypto assets. The proposal, dated August 25, is titled “Amendments to the Custody Rules” and is designed to “clarify the framework for the custody of crypto assets” for investment advisers and investment companies. According to the official filing, the SEC also wants to remove outdated provisions that are no longer needed for investor protection, given the evolution of trading and holding practices. The text is currently confidential, but the OMB regulatory record classifies it as having significant economic impact, meaning it could affect at least $100 million annually. The rule change arrives as Bitcoin (BTC) trades near $77,880, with the broader market watching for signals on institutional access.

The proposal is part of a broader regulatory push that has accelerated since the Clarity Act vote stalled in the Senate. The House passed the bill in July 2025 with a 294-134 vote, but it now faces a 60-vote test in the Senate, expected around September 15. SEC Chair Paul Atkins has said he is committed to supporting Congress in advancing the bill, but the agency is not waiting. The SEC’s filing explicitly targets digital assets and sets an October target for a formal proposal, which would open a public comment period. The agency’s move follows a separate proposal earlier this month to allow token issuers to raise money in the U.S. without violating securities laws. Together, the two proposals cover both sides of the market: how projects raise funds and how institutions hold them.

Lighter Standards Expected

The OMB filing carries two classifications that reveal the direction of the rule change. The first is significant economic impact, and the second places the rule in the deregulatory column under Executive Order 14192, signed by President Donald Trump in January 2025. That order requires agencies to eliminate ten rules for each new rule they introduce. According to the regulatory agenda summary, the SEC plans to ease custody duties for crypto assets rather than tighten them. Current rules require advisers to deposit client assets with a qualified custodian, typically a bank or broker, but few such firms accept crypto. This has left advisers with almost no legal means to hold digital assets. The SEC withdrew a stricter 2023 proposal in June 2025, and industry players including Andreessen Horowitz and Delphi Ventures have since submitted frameworks supporting multi-signature wallets and multi-party computation (MPC) tools, which split key control so no single party can move assets. The SEC’s own press release from August 18 states the agency is working to provide clarity while Congress establishes a permanent framework.

The custody proposal is the second major SEC rulemaking in a week, following the August 18 proposal to regulate digital asset offerings. The agency’s press release quotes Chair Paul Atkins as saying the Commission is continuing its efforts to bring clarity to crypto markets while Congress develops a permanent regulatory framework. The filing binds investment advisers and investment companies once finalized, and the comment period will last at least 60 days after publication. The SEC will need a final commission vote before the rule takes effect. Market participants are watching whether the OMB review signals a lighter-touch regime that could encourage institutional adoption of Bitcoin and other digital assets. As of now, the proposal remains in review, with no public timeline for release.