The US Securities and Exchange Commission (SEC) has submitted a new proposal to the White House aiming to modernize and clarify the regulatory framework for the custody of crypto assets by investment advisers and investment companies.
SEC calls for regulatory updates
The suggested rule changes are designed to improve existing custody regulations, reflecting changes in the structure of digital assets and security trading. The SEC stated that the adjustments would remove outdated requirements, lessening unnecessary burdens while continuing to prioritize investor protection.
In the proposal, SEC officials wrote that the rulemaking would address the custody of crypto assets by investment advisers and companies, while also introducing updates needed due to evolving practices in the markets and advancements in how assets are held and traded.
This rulemaking would clarify the framework for the custody of crypto assets for investment adviser and investment companies, as well as make other modernizations needed to remove burdens from certain outdated provisions that are no longer needed to provide investor protection given the evolution in the markets and security trading and holding practices.
The SEC is an independent agency responsible for enforcing federal securities laws and regulating the US securities industry, playing a key role in shaping approaches to digital assets and investor safeguards.
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AAPLLegislative developments and delays
The new SEC proposal arrives as Congress continues to debate the Clarity Act, a bill intended to define the regulatory treatment of digital assets. Pro-crypto lawmakers had hoped to secure a vote on the legislation before the August recess, but the decision has been postponed to September due to objections from some Democratic legislators regarding the latest draft.
Republican senators, including Cynthia Lummis, accused colleagues of intentionally hindering the bill’s progress. Meanwhile, proponents of clearer digital asset regulations remain intent on moving forward with alternative policy measures.
Regulatory agencies push for action
Commodity Futures Trading Commission (CFTC) Chairman Michael Selig stated that rulemaking on crypto assets will proceed regardless of the outcome of the Clarity Act and expressed intentions to finalize rules before the end of the current US administration’s term.
Earlier this month, the SEC put forward a framework to allow token issuers to raise capital in the US without violating securities laws, further signaling the agency’s intent to provide greater regulatory clarity for digital asset markets.
Both the SEC and CFTC are federal agencies tasked with overseeing financial markets, including securities and commodities trading, and have taken increasingly active roles in addressing policy gaps around digital assets.
Mini dictionary: Clarity Act, legislation under consideration in the US Congress that seeks to establish clear definitions and regulatory guidelines for digital assets, aiming to reduce legal uncertainty for industry participants.
Executive and industry perspectives
President Donald Trump, who campaigned in support of the crypto industry and drew significant backing from technology entrepreneurs, has instructed lawmakers to advance the Clarity Act. Since the start of his current term, federal agencies have notably shifted their approach to overseeing the digital asset sector.
SEC Chair Paul Atkins stated his commitment to supporting congressional action, pledging cooperation as legislative and regulatory frameworks for crypto assets continue to evolve.
SEC Chair Paul Atkins expressed that he is committed to supporting Congress in advancing the Clarity Act, emphasizing ongoing collaboration with lawmakers to provide clear and modern oversight of digital assets.
