SEC Chair Paul Atkins has asked agency staff to develop a proposal that could permit investment advisers to self-custody crypto assets under specified conditions. As of his September 14, 2026 remarks, however, that is a prospective rulemaking initiative—not an adopted authorization for advisers to hold client crypto keys themselves.
The operative starting point remains the SEC's investment-adviser custody framework, which generally requires client funds and securities to be held by a qualified custodian. A separate, conditional staff no-action position already provides a potential route for certain state-chartered trust companies to custody crypto assets and related cash. Neither development means that every crypto platform, wallet provider, or adviser qualifies automatically.
What the SEC chair has asked staff to propose
Atkins said he had directed SEC staff to develop a proposal that could allow investment advisers to self-custody crypto assets, subject to specified conditions, and allow advisers to use state trust companies as custodians. The statement was made at the Solana Policy Institute's Washington x Wall Street summit on September 14, 2026, according to the SEC's account of the event.
A chair's request to staff is not Commission action. It does not itself amend the custody rule, establish the conditions an adviser would have to meet, or create a present exemption from existing obligations. A proposal would still need to set out its terms through the SEC's rulemaking process before any final rule could be adopted.
That distinction matters because “self-custody” can mean different things in ordinary crypto usage. For an investment adviser, the question is not simply whether it can operate a wallet. It is whether the adviser can safeguard assets over which it has custody while meeting the investor-protection requirements that apply to its advisory relationship.
The qualified-custodian baseline for investment advisers
Under the existing framework, investment advisers that have custody of client funds or securities generally must maintain those assets with a qualified custodian. The SEC's custody-rule materials identify custodial arrangements, client account statements, custody controls and examinations as safeguards designed to protect advisory clients.
The framework separates the adviser that makes or implements investment decisions from the institution that holds client assets, creating controls around possession and movement of client property. That qualified-custodian baseline also applies to crypto custody: any adviser self-custody pathway would be a specified exception or tailored accommodation, not something implied by technical control of a blockchain address.
Whether custody obligations apply depends on the particular asset, adviser arrangement and service provider. An announcement about a future proposal does not replace an assessment of current compliance obligations. The SEC's custody-rule release remains the foundation for the general requirements described here.
State-chartered trust companies: existing conditional staff relief
There is already a more immediate but narrower development involving state-chartered trust companies. On September 30, 2025, the SEC Division of Investment Management staff issued a no-action position under which registered advisers and regulated funds, subject to stated conditions, may treat certain state-chartered trust companies as banks or permitted custodians for crypto assets and related cash.
This is not a Commission rule that broadly redefines qualified custodians. It is staff relief limited to the facts presented and the conditions in the letter, which means its availability depends on the relevant arrangement satisfying those terms. The underlying Division of Investment Management no-action letter is the controlling source for those conditions.
Among other things, an adviser must have a reasonable basis to believe that the trust company is authorized by its state banking authority to provide crypto custody. The company also must maintain written safeguards addressing theft, loss, misuse, misappropriation, private-key management and cybersecurity.
The relief is therefore materially different from adviser self-custody. In the state-trust scenario, the adviser is considering an outside entity as custodian. In self-custody, the adviser itself would take on the safeguarding function that the qualified-custodian structure normally places elsewhere.
How adviser self-custody would differ from using a custodian
Crypto custody is closely tied to the ability to authorize transfers. A private key, or another mechanism that can cause a transaction to be signed, can provide the practical means to move assets. That makes control over credentials, transaction approvals and recovery processes central questions when an adviser proposes to hold crypto directly.
Consider a simplified client-account sequence. With an outside custodian, the adviser may direct or arrange a transaction while the custodian holds the assets and operates the custody controls. With self-custody, the adviser would need a method to hold or administer the means of transfer itself, while showing that client assets remain protected against improper movement.
Control of a key alone does not necessarily demonstrate exclusive control. SEC and FINRA staff have identified the possibility that private-key control may fail to prove exclusivity, prevent unauthorized transfers, or allow mistaken transactions to be reversed. Their joint staff discussion of digital-asset custody risks highlights why a self-custody regime would require more than a claim that an adviser has a wallet.
Blockchain transactions can also raise an operational problem that conventional custody systems seek to manage through established processes and institutional controls: a transfer made in error may not be reversible. That does not determine what an eventual SEC proposal would require, but it helps explain why conditions around authority, approvals and incident response would be consequential.
The safeguards a self-custody framework would need to address
The details of the chair-requested proposal have not been published, so no one can yet identify its final conditions. Still, the custody issues identified by SEC and FINRA staff point to the core questions a framework would need to confront: who can authorize transfers, how the adviser establishes exclusive control, how unauthorized activity is stopped, and what happens if credentials are compromised or a transaction is erroneous.
Key management and cybersecurity would be central rather than ancillary. The state-trust-company staff relief offers a useful illustration of the type of risks regulators may expect a crypto custodian to address in writing—private-key management, theft, loss, misuse, misappropriation and cybersecurity—even though that relief does not prescribe rules for adviser self-custody.
Documentation and oversight would also be important to a workable arrangement. The existing custody framework is not solely about where assets sit; it incorporates account statements, controls and examinations. A crypto-specific route would have to address how comparable protections operate when the adviser has a direct role in safeguarding or authorizing movements of client assets.
An SEC-hosted paper on custody-rule modernization outlines a possible risk-aligned model under which advisers could use secure safeguarding solutions that are not qualified custodians. But the framework paper is a proposal for a model, not binding law or a current safe harbor. It may inform the policy debate, but it does not independently permit an adviser to self-custody.
What has not changed in the SEC's crypto custody rules
The SEC's 2023 proposed safeguarding rule should not be treated as a rule now in force that authorizes self-custody. That proposal would have expanded the safeguarding framework to expressly cover crypto assets, but it did not itself authorize adviser self-custody. The SEC described it as a proposal in its February 2023 release.
Nor does the SEC's August 18, 2026 statement on crypto-asset regulation answer the custody question. That statement concerned proposed offering exemptions and an investment-contract safe harbor, not the adoption of rules on adviser self-custody or state-trust-company custody, as the SEC statement makes clear.
For now, the practical status is straightforward: qualified-custodian requirements remain the general baseline; certain state-chartered trust companies may fit within conditional staff no-action relief; and adviser crypto self-custody awaits the terms, if any, of a future Commission proposal and rulemaking process.
Frequently Asked Questions
Can SEC-registered investment advisers self-custody crypto assets now?
Chair Atkins has requested a proposal that could allow it under specified conditions, but that request is not an adopted rule. Advisers remain subject to the existing custody framework unless a particular arrangement fits applicable relief or another legal basis.
What is a qualified custodian in this context?
It is the type of institution with which an adviser generally must maintain client funds and securities when the adviser has custody. The framework also uses protections such as account statements, controls and examinations.
Does the SEC staff relief mean all state trust companies can custody crypto for advisers?
No. The September 2025 position is conditional and fact-specific. It requires, among other matters, a reasonable basis to believe the company is state-authorized for crypto custody and has written safeguards for specified risks.
Why is private-key control not enough for adviser self-custody?
A key may enable a transfer without proving that no other party can act, that unauthorized transfers will be prevented, or that an error can be undone. Those operational limits are central to the regulatory custody analysis.
Did the SEC's proposed safeguarding rule approve crypto self-custody?
No. The 2023 proposal would have expressly addressed crypto assets within an expanded safeguarding framework, but it did not grant advisers permission to self-custody client crypto assets.
