The Securities and Exchange Commission has sent its proposed rewrite of custody rules for investment advisers and investment companies to the White House for review, a key step before the rule can be finalized. The new proposal, which entered review on Aug. 25, is a crypto-focused framework for custody rules. The SEC also withdrew a separate 2023 safeguarding proposal.
A crypto-focused framework
The new proposal is built around digital assets, a departure from the earlier safeguarding plan that covered a broader range of assets. The SEC hasn't released the full text yet, but the move signals a more targeted approach to how advisers and funds hold crypto. The withdrawal of the 2023 proposal suggests the agency is starting fresh rather than patching the old one.
What the withdrawal means
The 2023 safeguarding proposal is gone. That plan would have required advisers to hold client assets with qualified custodians and get written agreements. The SEC pulled it as part of the new push. The timing isn't accidental — the agency is reworking its custody rules with crypto in mind, and the old framework didn't fit.
Next steps
White House review is a standard step in the rulemaking process. Once that's done, the SEC can publish the proposal for public comment. That's when the details will come out. Until then, the industry is waiting to see how the agency defines custody for digital assets — and whether it will require separate accounts, insurance, or something else.
