SEC Advances Proposal Review for Cryptocurrency Custody Rules

The Chief Legal Advisor of the U.S. Securities and Exchange Commission (SEC) cryptocurrency working group, Taylor Lindman, stated at the CoinDesk Policy & Regulation event that the SEC is advancing cryptocurrency custody rules. The relevant proposal has been submitted for review by the Office of Management and Budget (OMB) at the White House, covering investment companies and broker-dealers. The rule aims to inform the market on how to hold non-securities cryptocurrency assets within broker-dealers without special registration and clarifies that investment advisors can store client assets in state-chartered trusts and other institutions. Once the proposal passes review, the SEC will formally present it and seek feedback from the industry and the public. Lindman mentioned that the SEC issued an employee statement in December 2025 as a transitional arrangement, guiding broker-dealers on handling cryptocurrency custody matters before the rule is implemented, and will allow investment advisors to store client assets in state-chartered trusts as qualified cryptocurrency custodians starting September 2025. Lindman described the SEC's recent work as "laying the groundwork," including previously proposed rules allowing cryptocurrency issuance and exemptions for tokenized securities. She stated that the SEC is working to enable existing securities intermediaries and market participants to confidently use blockchain, hold, and trade cryptocurrency assets.

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