SEC Proposal Would Address How Investment Advisers and Funds Can Custody Crypto Assets Under the Federal...

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Published: 2026-10-10T10:30:31.972Z • Permanent link

SEC Chairman Gary Gensler is spearheading a high-stakes initiative that could fundamentally alter the global cryptocurrency landscape. On September 26, the Securities and Exchange Commission unveiled a groundbreaking proposal, designed to provide a tailored framework for the custody of crypto assets for registered investment advisers and regulated funds. The move comes on the heels of a string of high-profile hacks and security breaches involving cryptocurrency exchanges and custodians, prompting calls for greater regulatory oversight.

The proposal, which is currently open for public comment, aims to address the regulatory vacuum surrounding the custody of crypto assets. In a statement, Gensler emphasized the need for "stronger protections" for investors, citing the risks associated with the current lack of standards. The SEC's move is widely seen as a response to the growing concerns about the security and integrity of cryptocurrency markets. Notably, the agency's decision is also expected to have significant implications for the broader financial industry, with many firms already expressing support for the proposed framework.

Industry insiders are hailing the proposal as a major breakthrough, with some analysts predicting that it could pave the way for a more robust and regulated cryptocurrency market. Notably, the proposal has already garnered support from several prominent industry players, including Fidelity Investments and Goldman Sachs. As the proposal continues to make its way through the public comment period, it remains to be seen how it will shape the future of cryptocurrency custody.

The SEC's proposal has significant implications for the global financial infrastructure, with far-reaching consequences for markets, firms, and regulators. One of the most immediate impacts is expected to be felt by registered investment advisers and regulated funds, which will be required to implement new custody procedures and protocols to ensure the secure storage of crypto assets. According to industry estimates, this could result in significant costs and logistical challenges for firms, with some predicting that the total bill could run into the tens of billions of dollars.

The proposal also has significant implications for the broader cryptocurrency market, which has long been plagued by concerns about security and volatility. As the SEC moves to establish clearer guidelines and standards, it is likely to help restore confidence in the market and pave the way for greater institutional investment. Notably, the proposal is also expected to have significant implications for the global economy, with some analysts predicting that it could help to drive the growth of the cryptocurrency sector and contribute to the development of a more robust and decentralized financial system.

The SEC's proposal is part of a broader trend towards increased regulatory oversight and scrutiny of the cryptocurrency sector. In recent years, several countries and regulatory bodies have moved to establish clearer guidelines and standards for the industry, with some predicting that this trend will continue in the years to come. Notably, the European Union's Fifth Anti-Money Laundering Directive, which came into effect in December 2020, imposes significant reporting and transparency requirements on cryptocurrency exchanges and custodians.