What happened
The US Securities and Exchange Commission proposed new custody rules on 1 October 2026. The 760-page proposal covers registered investment advisers and regulated funds that hold bitcoin or other crypto assets for clients.
An investment adviser manages money or gives investment advice for clients. Today, an adviser usually needs a qualified custodian, such as a bank or broker-dealer, to hold client assets. The SEC says that model does not always fit crypto assets.
The proposal adds two routes. It would let an adviser hold a client's crypto itself when no qualified custodian is available. It would also let some state trust companies act as crypto custodians if they meet new conditions.
What self-custody means here
This is not personal self-custody. The client would not hold the keys. The investment adviser would control the keys on the client's behalf.
That route is deliberately narrow. The adviser would have to decide that no qualified custodian is available for each asset and repeat that check every quarter. If one becomes available, the adviser would have to move the asset as soon as reasonably practical.
The adviser would also need systems for private-key management and cybersecurity. At least two people would have to approve a transaction together. Each client's assets would sit at addresses used only for that client, and the client would receive information about balances and transactions at least quarterly.
State trust companies would face a different test. The adviser or fund would have to check that the company is authorized by its state, uses safeguards against theft and loss, and has audited financial statements and internal-control reports.
Why it matters for bitcoin
The proposal gives regulated advisers a possible path to hold bitcoin directly for clients when ordinary custody is unavailable. It also treats control of private keys as an operational risk that needs separation, records and outside review.
That could remove one legal obstacle for advisers that want to offer bitcoin strategies. It does not make adviser custody equivalent to holding one's own keys. A client would still depend on the adviser, its staff and its recovery process.
What has not changed
This is a proposal, not a final rule. The SEC will accept comments for 60 days after publication in the Federal Register. The text can change before any adoption, and the Commission could decide not to adopt it.
The rule would not require anyone to buy bitcoin. It would not change how an individual may hold bitcoin outside an advisory account. It also covers crypto assets broadly, so its effect is not limited to Bitcoin.
Reuters, CoinDesk, The Block, Decrypt and Cointelegraph independently reported the proposal. They agree on the two main routes and on the fact that neither is in force yet.