With custody rules proposed, the SEC has cleared every item on Atkins’ crypto agenda

The SEC’s proposed crypto custody rules for investment advisers and funds, released October 1, 2026, reportedly complete a sweep of every major item on Chairman Paul S. Atkins’ digital-asset agenda, all of it through agency rulemaking after Congress failed to pass a market-structure bill.

The commission proposed a tailored framework for holding crypto assets at registered investment advisers and regulated funds, amending rules under the Investment Advisers Act of 1940 and the Investment Company Act of 1940. It permits self-custody when no permitted custodian is available for an asset and allows state trust companies to serve as custodians. A 60-day public comment period opens once the proposing release is published in the Federal Register.

A rulemaking spree after the CLARITY Act stalled

The custody proposal is the third pillar in an SEC regulatory build-out launched after the CLARITY Act, which would have classified digital assets as securities, commodities or payment stablecoins, failed to advance in a procedural Senate vote last month. September brought the Innovation Exemption for tokenized stocks on-chain, and August produced the Regulation Crypto Assets fundraising framework.

With the custody rules now on the table, the SEC has reportedly put a checkmark on every major topic on the agenda Atkins laid out. The commission is not acting alone: the CFTC has submitted its own crypto-market proposal for White House review, and the SEC had sent the White House a custody-framework proposal before the CLARITY Act vote.

Atkins framed the proposal as closing a gap between the market and rules written for another era. The crypto market has grown “from a niche curiosity into a multi-trillion-dollar asset class,” he said in the announcement, and the proposal would give advisers and funds “a compliant pathway where none existed before.”

What the proposal actually changes

The framework replaces an ambiguity that has kept many firms on the sidelines. Advisers must keep client assets with “qualified custodians,” but which crypto arrangements satisfied that bar has long been unclear, leaving firms hesitant to offer digital-asset strategies at all. The proposal would also allow state-chartered trust companies to act as custodians if they are authorized by their state, hold audited financial statements, keep client holdings segregated from their own assets and maintain procedures against loss, theft or misappropriation.

The sweep comes as the commission itself shrinks. Commissioner Hester Peirce, who leads the Crypto Task Force, is reportedly set to leave the agency on the Friday after the proposal to take a teaching post in Virginia, which would leave two commissioners. The SEC reportedly lowered its quorum requirement from three commissioners to two in the days before the release.

The proposal is not final. The comment window runs 60 days from Federal Register publication, a date that has not yet been set.