SEC proposes crypto custody rules for advisers and regulated funds
The SEC has published a proposed rulemaking addressing how registered investment advisers and regulated funds may custody crypto assets, creating new rules alongside amendments to the existing Advisers Act and Investment Company Act custody frameworks. This segment covers the scope of the proposal, its stated rationale, and the comment timeline that compliance and legal teams need to track.
- Comments on the proposal must be received by the Commission no later than December 7, 2026, under File Number S7-2026-35.
- The Advisers Act custody rule 206(4)-2 would be amended and redesignated as rule 223-1, with conforming changes to Form ADV and Form ADV-E.
- The Commission proposes new rules 17f-8 and 17f-9 under the Investment Company Act while proposing to rescind rule 17f-3 and Form N-17f-1.
- The proposal adds new questions to Form ADV and Form N-CEN specifically addressing tokenized private funds and tokenized regulated investment company shares.
- The Commission cites a global crypto market capitalization of approximately $2.7 trillion in May 2026, up from $800 billion at the beginning of 2021.