The Securities and Exchange Commission submitted on August 25 a proposal to the Office of Management and Budget to modernize custody rules for approximately 15,000 registered investment advisers and regulated funds holding digital assets. This initiative, led by SEC Chairman Paul Atkins, aims to clarify the existing framework, update regulations written before the crypto era, and remove outdated provisions deemed unnecessary for investor protection. A public comment period of at least 60 days will follow after the official publication of the text. This overhaul is part of a broader deregulatory push under Paul Atkins, who notably issued a no-action letter in September 2025 allowing certain state-chartered trust companies to serve as qualified custodians. Custody has remained a major friction point preventing traditional financial institutions from deeper crypto adoption, and the competitive positions of traditional banks, crypto-native custodians, and hybrid firms will be significantly affected depending on how the final rule defines qualified custodian for digital assets.
Source: Read the original article
