U.S. market regulator seeks to make it easier for funds, advisers to hold crypto

• The proposal establishes a tailored custody framework for registered investment advisers, investment companies, and business development companies to hold crypto assets
• The regulatory push follows the stalling of the Clarity Act, a sweeping crypto market structure bill, in the Senate, prompting regulators to build rules under existing authority
• The changes come as Bitcoin and crypto markets show renewed momentum after a volatile period from late 2025 into the first half of 2026

Summary:

The U.S. Securities and Exchange Commission (SEC) proposed new rules Thursday to facilitate cryptocurrency custody for investment advisers, investment companies, and business development companies. The framework aims to modernize decades-old custody requirements that have prevented advisers from offering crypto-related investments to clients.

Key Provisions:

• Allows self-custody of crypto assets under certain circumstances
• Permits state trust companies to serve as custodians for digital assets
• Enables regulated funds to expand crypto-related investment strategies

SEC Chairman Paul Atkins stated the proposal addresses regulatory gaps as digital assets have evolved into a multi-trillion-dollar market. "Today's proposal would provide a clear regulatory framework for the custody of crypto assets, giving investment advisers and funds a compliant pathway where none existed before," Atkins said.

Regulatory Context:

The announcement follows the stalling of the Clarity Act—comprehensive crypto market structure legislation—in the Senate. U.S. regulators are now proceeding with building crypto rules under existing authority rather than waiting for new legislation. The proposal will undergo a 60-day public comment period after Federal Register publication.

Market Implications:

The regulatory development coincides with recovering crypto market momentum after volatility earlier in the year. Bitcoin has rebounded following a prolonged downturn from late 2025 into mid-2026, supported by improving risk appetite.

This represents a significant shift in the SEC's approach to digital assets under Atkins' leadership, potentially opening institutional access to cryptocurrency investments while maintaining investor protection standards. The move could increase mainstream adoption of crypto assets among regulated investment vehicles.