The U.S. Securities and Exchange Commission has formally proposed new custody rules targeting registered investment advisers and regulated funds, aiming to create a more robust framework for safeguarding digital assets. The proposal would replace existing custody provisions and introduce Rule 233-1, expanding the definition of custodial assets to encompass a broader range of crypto holdings.
The initiative follows a no-action relief issued in September 2025 that provided temporary flexibility for crypto custody practices, and it was highlighted by commentator @matthew_sigel. Under the new framework, investment advisers would need to adopt the safeguarding rule, while registered investment companies and business development companies would also be impacted. The public comment period will remain open for 30 days from the announcement.
Market conditions have been quiet, with no significant trading volume reported in the last 24 hours, reflecting caution as traders await further regulatory clarity. The SEC’s push is part of its broader effort to adapt investor protection rules to the evolving crypto landscape, potentially improving transparency and investor trust while raising compliance expectations for advisers and funds.
The effective date has not yet been established. Market participants are watching for the SEC’s finalization of the rules, possible adjustments based on industry feedback, and any shifts in trading behavior or asset allocation among investment advisers and funds.
