The Securities and Exchange Commission has proposed a custody framework for regulated funds and registered investment advisers handling crypto assets. The proposal would allow self-custody in specified circumstances and permit state trust companies to serve as custodians.
Here, self-custody is a regulated arrangement, not a synonym for any person holding a seed phrase. The proposed text addresses cases in which an adviser controls the portion of private keys needed to access or transfer client assets, or a fund holds assets through its adviser. Conditions are aimed at conflicts, recordkeeping and custody risk.
The scope is equally important. The proposal concerns registered advisers, regulated investment companies, business development companies and the crypto funds or securities covered by the relevant federal laws. It does not convert every household wallet into an SEC custody account.
This is proposed law. File S7-2026-35 carries an October 1 issue date, and the SEC lists comments as due December 7. Until the Commission adopts a final rule, the operative facts are the proposal, its defined pathways and an open record—not a new universal custody regime.
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