The U.S. Securities and Exchange Commission plans to introduce more crypto regulatory proposals, Chair Paul Atkins said. His comments follow the agency’s October 1 proposal on how investment advisers and regulated funds can hold crypto assets. The custody plan forms part of a broader effort to update federal securities rules for digital assets.
Atkins said the SEC would continue developing its crypto framework after addressing custody requirements. “Our work is not finished. More regulatory proposals are on the horizon,” he said. His statement did not set a release date or identify the subjects of the next proposals.
The SEC chair linked the custody proposal to earlier agency actions covering token offerings, tokenized securities and blockchain trading. He described the measures as parts of a wider regulatory approach, with further work planned under the commission’s existing authority.
Atkins said older custody requirements largely address traditional financial assets. Many provisions predate the internet, while demand for crypto investments has grown. He argued that advisers and funds need clearer rules for holding digital assets on behalf of clients.
He pointed to delays in available custody services. Existing rules require firms to use permitted custodians, but providers may take months to support newly developed crypto assets. According to Atkins, the proposed framework seeks to address the gap while retaining protections against theft, misuse and loss.
The SEC announced its custody proposal on October 1. It covers registered investment advisers, registered investment companies and business development companies. The changes would operate under the Investment Advisers Act of 1940 and the Investment Company Act of 1940.
Under the plan, advisers and regulated funds could hold crypto assets themselves in certain circumstances. The proposal would permit state trust companies to serve as custodians for client and fund crypto holdings, subject to conditions.
Beyond crypto, the package would update existing custody requirements. Proposed changes address financial statement audits for investment advisers and broker-dealer custody services for regulated funds. The agency said the revisions respond to current industry practices and feedback.
The custody changes remain proposals. The SEC will accept public comments for 60 days after publishing the proposing release in the Federal Register. The commission would need to adopt final rules before firms could rely on the proposed custody permissions.
The custody proposal follows the SEC’s September 17 Innovation Exemption for certain tokenized stock trading. Atkins stated that the temporary measure provides conditional relief for eligible trading venues and liquidity providers. Federal rules against fraud and market manipulation continue to apply.
Participating venues must restrict access to eligible participants and comply with U.S. sanctions requirements. Eligible tokenized stocks must preserve shareholder rights, including dividends and voting. Issuers must have an opportunity to prevent their securities from trading on participating venues.
Meanwhile, the SEC proposed Regulation Crypto Assets in August. The plan includes a startup offering exemption of up to USD 5 million over four years and a fundraising exemption of up to USD 75 million annually. Both initiatives remain part of the agency’s continuing crypto rulemaking program.
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