What happened
On 25 August 2026 the White House Office of Information and Regulatory Affairs received a draft Securities and Exchange Commission rule titled "Amendments to the Custody Rules", filed under RIN 3235-AN46 at the proposed rule stage and flagged economically significant. The agency's own agenda entry says it would modernise the rules on custody of advisory client and fund assets "including to address in each case crypto assets", because "investment advisers and investment companies have raised questions about how to hold crypto assets in compliance with the current Commission custody requirements". A notice of proposed rulemaking is pencilled in for October 2026. Nobody outside the review has read the draft.
What it changes
It restarts something the Commission had formally abandoned. Under the current rule, 17 CFR 275.206(4)-2, an adviser with custody of client funds and securities must keep them with a qualified custodian, and paragraph (d)(6) defines that as one of four things: an insured bank or savings association, a registered broker-dealer, a registered futures commission merchant, or a foreign financial institution that segregates client assets from its own.
None of those four categories is defined by the thing that actually controls a bitcoin, which is a private key. A firm can hold keys competently and be none of them; a bank can be one of them and hold no keys at all. The rule also speaks of "funds and securities", which leaves an adviser holding coins arguing about which word covers them. That is the gap the agenda entry is describing, and it has been open since advisers started holding these assets for clients.
The other change is one of direction. The 2023 attempt at this, release IA-6240 of 15 February 2023, widened the rule to more assets and more activities. This one is tagged deregulatory under Executive Order 14192 in the same agenda entry. Same subject, opposite posture.
What it does not change
No rule changed on 25 August. Advisers and funds are under 206(4)-2 and the Investment Company Act custody provisions exactly as they were the day before.
Review at OIRA is a checkpoint, not a decision. After it, the Commission still has to vote to publish, take comment, and vote again to adopt. Each of those can change the text or end it, and the 2023 round shows that a proposal reaching publication guarantees nothing. The Commission withdrew that one on 12 June 2025, in a notice covering a batch of proposals it had issued between March 2022 and November 2023.
And the draft is not public. Several reports this week described what the rule would permit, naming particular key-management arrangements such as multisig. Those descriptions are not sourced to a document anyone can check, because the text stays sealed until the Commission votes to publish it. Treat any account of its contents accordingly.
Finally, this is a rule about holding coins for other people. It reaches registered advisers and registered funds. It has nothing to say about an individual in self-custody, whose custodian problem is solved by not having one.
Context
The pattern is one we have seen before: a rule aimed at cryptoassets moves slowly enough that the market settles the question first. The Basel cryptoasset standard reached its implementation date with the text already reopened and almost nobody having transposed it.
What makes custody different is that the question is narrow and answerable. Either the categories in (d)(6) grow a definition that turns on key control, or advisers keep mapping an asset that is a key onto a list written for assets that are entries in somebody's ledger. The draft at OIRA is an attempt at the first. Until it is published, that is all anyone outside the Commission knows about it.