SEC Reg Crypto Proposal Starts 60-Day Federal Register Comment Clock

The Securities and Exchange Commission has proposed a tailored custody framework for crypto assets held by registered investment advisers and regulated funds, and the agency says the public comment period will run for 60 days after the proposal is published in the Federal Register. The SEC's release, dated October 1, 2026, describes rules and amendments under the Investment Advisers Act of 1940 and the Investment Company Act of 1940 that would permit crypto assets to be held in self-custody under certain circumstances and allow state trust companies to serve as custodians. Chairman Paul S. Atkins framed the proposal as replacing what he called the grey of uncertainty left by custody rules crafted for a bygone era. Separately, the Federal Reserve Board extended the comment period on its Regulation O insider-lending proposal to November 4.

Background

The SEC's release grounds the proposal in the growth of the crypto asset market, stating that since the advent of Bitcoin in 2008 the market has grown from a niche curiosity into a multi-trillion-dollar asset class to which investors actively seek exposure. The agency says its rules and regulations have not kept pace with that growth. The proposal is aimed at registered investment advisers and regulated funds, defined in the release as registered investment companies and business development companies. According to the SEC, the proposal would modernize custody rules and expand investor choice by removing regulatory barriers that inhibit an adviser's ability to provide crypto-related investment advice, and would allow regulated funds to offer clients access to a wider range of crypto asset-related investment strategies. The release also says the proposal would update a number of requirements relating to, among other things, financial statement audits for registered investment advisers and broker-dealer custodial services for regulated funds. The SEC states that the comment period will remain open for 60 days following publication of the proposing release in the Federal Register. The same day, the Federal Reserve Board issued a separate release on Regulation O, its rule governing the extension of credit by a bank to insiders such as bank executives, board members and major shareholders who could potentially influence a bank's lending decisions. The Fed said it extended that comment period until November 4, from an original October 5 deadline, to allow interested parties more time to analyze the issues and prepare their comments. The two releases concern different rulemakings and different regulators.

What happened

The SEC's release states that the Commission proposed new rules and amendments to provide a tailored framework for the custody of crypto assets for registered investment advisers and regulated funds. The release is dated Washington D.C., October 1, 2026, and carries a last reviewed or updated date of October 1, 2026. According to the SEC, the proposal would modernize custody rules and expand investor choice by removing regulatory barriers that inhibit the adviser's ability to provide crypto-related investment advice, and would allow regulated funds to offer clients access to a wider range of crypto asset-related investment strategies. The release states that the proposed rules and amendments under the Investment Advisers Act of 1940 and the Investment Company Act of 1940 would better address current industry practices and update a number of requirements relating to, among other things, financial statement audits for registered investment advisers and broker-dealer custodial services for regulated funds. The SEC further states that the proposal would permit crypto assets to be held in self-custody under certain circumstances and allow the use of state trust companies as custodians for client and regulated fund crypto assets. Chairman Paul S. Atkins, in a statement quoted in the release, said the crypto asset market has grown from a niche curiosity into a multi-trillion-dollar asset class and that the agency's rules have not kept pace, describing the proposal as giving advisers and funds a compliant pathway where none existed before and replacing the grey of uncertainty created by custody rules crafted for a bygone era. The release states that the public comment period will remain open for 60 days following publication of the SEC's proposing release in the Federal Register. In a separate release also dated 2026-08-21, the Federal Reserve Board announced it will extend until November 4 the comment period on its proposal to modernize Regulation O, with comments originally due by October 5, to allow interested parties more time to analyze the issues and prepare their comments.

Market impact

The sources contain no price, trading volume, fund flow or asset-under-management figures for any crypto asset, fund or adviser, so no market reaction can be quantified from them. The only quantitative references in the SEC release are the 60-day comment period following Federal Register publication, the year 2008 as the advent of Bitcoin, and the characterization of the crypto asset market as a multi-trillion-dollar asset class. The Federal Reserve release supplies two dates rather than market data: a November 4 extended deadline and an original October 5 deadline for comments on the Regulation O proposal. Because the SEC's release does not state a publication date for the proposing release in the Federal Register, the sources do not establish the exact day the 60-day window closes; they establish only that it begins on publication and lasts 60 days. No source describes expected capital flows, custody market share, or the number of advisers or funds that would use the proposed framework. Any assessment of market impact would therefore rest on the structural changes the SEC describes, namely a compliant custody pathway, conditional self-custody and the use of state trust companies, rather than on observed figures.

Why it matters

The consequences the sources support are structural rather than quantitative. The SEC states that its proposal would remove regulatory barriers that inhibit an adviser's ability to provide crypto-related investment advice, which the agency presents as expanding investor choice. It would also allow regulated funds, defined as registered investment companies and business development companies, to offer clients access to a wider range of crypto asset-related investment strategies. Two specific mechanisms in the release matter for how crypto would be held: permission for crypto assets to be held in self-custody under certain circumstances, and permission to use state trust companies as custodians for client and regulated fund crypto assets. The release also ties the package to operational requirements, including financial statement audits for registered investment advisers and broker-dealer custodial services for regulated funds. Chairman Atkins's quoted statement frames the proposal as supplying a clear regulatory framework and a compliant pathway where none existed before. The 60-day comment window described by the SEC is the mechanism through which the public can respond before any final action, and the release does not state that the proposal has been adopted. The Federal Reserve's separate Regulation O extension is a scheduling change to a different rulemaking and does not alter the SEC proposal.