Key takeaways
- The SEC proposes a crypto custody framework for investment advisers and regulated funds, followed by a 60-day comment period
- State trust companies would serve as custodians for client and regulated fund crypto assets under the SEC proposal
- Hester Peirce says self-custody here means advisers acting as custodians, not investors directly controlling their own crypto
On October 1, 2026, the U.S. Securities and Exchange Commission (SEC) proposed a new regulatory framework for the custody of crypto assets by investment advisers and regulated funds. SEC Chairman Paul Atkins said the proposal would give investment advisers and funds a compliant pathway where none existed before.
A 60-day public comment period follows, and the proposal is not yet a final rule. Until the SEC adopts a final rule, the custody framework for investment advisers and regulated funds remains a proposal. SEC Commissioner Hester Peirce clarified that self-custody refers to advisers acting as custodians for client assets, rather than investors directly controlling their own crypto.
State Trust Companies and Limited Self-Custody
The proposal would allow state trust companies to serve as custodians for client and regulated fund crypto assets. It would also permit adviser self-custody of crypto assets in limited circumstances, such as when no permitted custodian is available.
Bitcoin Magazine reports that records kept on a blockchain could count toward compliance, subject to conditions.
According to TFTC, the self-custody carve-out requires a quarterly adviser certification, and the proposal would supersede the 2023 Safeguarding Rule.
Bitcoin Magazine reports the proposal would allow advisers and funds to hold client crypto themselves, but only if no permitted custodian is available. Peirce's clarification means the self-custody carve-out covers advisers acting as custodians for client assets, not individual investors directly controlling their own crypto.
Advisers Look Past the ETF Wrapper
The Block reports that the proposal matters for asset managers, hedge funds and others who want to hold bitcoin directly rather than through an ETF or another intermediary.
TFTC says registered investment advisers (RIAs) that previously had no compliant path to Bitcoin exposure through a regulated custodian now have one, pending finalization. TFTC also reports that the CLARITY Act failed a Senate cloture vote 49-50 on September 15, 2026.
Why It Matters
RIAs manage retirement savings, family offices and pensions, and as legally bound fiduciaries they could not touch bitcoin without SEC-compliant custody rules, so paper bitcoin through an ETF was their route. A final rule that lets state trust companies, and advisers themselves in limited circumstances, act as custodians would let that sidelined private capital hold bitcoin directly rather than relying solely on ETFs, removing paper layers between savers and the asset. Expect the proposal to feed the already baseless narrative that Wall Street can take over Bitcoin, but advisers holding coins directly through state trust companies still have to follow the same consensus rules as everyone else.
