The Securities and Exchange Commission (SEC) has submitted proposed amendments to the Custody Rule to the Office of Information and Regulatory Affairs (OIRA) for review. The rule, deemed economically significant, will revisit who should safeguard customer cryptocurrency. Publication is expected by October 2026, followed by a 60-day public comment period and a second commission vote, meaning compliance may take years. Meanwhile, institutional Bitcoin ETF holdings rose 7.5% to 535,723 BTC in Q2 2026 despite Bitcoin’s 14.2% decline, with institutional ownership reaching 44.2%.
The SEC announced it will revisit the question of who should safeguard customer cryptocurrency as part of its proposal to update the Custody Rule. On August 25, the SEC submitted the proposed amendments to OIRA, which reviews all economically significant regulations.
This action follows a White House crypto meeting between President Donald J. Trump and crypto executives. Because the proposed amendments are considered economically significant, they are currently under review by the White House.
Commissioners are prohibited from voting on or disclosing information about the proposed rulemaking until the OIRA review is complete. The SEC anticipates the publication of the proposed rulemaking will occur no later than October 2026.
Once published, there will be a minimum of 60 days for public comment. The proposal provides some guidance on custodian expectations but does not offer absolute certainty immediately.
These proposed amendments have not yet been released publicly and cannot be implemented by industry participants. Both analysis and a second commission vote are required before they can take effect, meaning participants may need to wait several years for compliance to become mandatory.
Institutional demand for crypto exposure is already visible. In Q2 2026, institutional Bitcoin ETF holdings rose 7.5% to 535,723 BTC, despite Bitcoin’s 14.2% decline. The proportion of institutional ownership reached 44.2%, up from 38.4%, while total ETF holdings decreased 6.6% to 1.21 million BTC.
Custody fees currently range from four to 15 basis points annually, with insurance varying from $200 million to $750 million. Smaller advisers may face higher compliance costs.
Future filings will show whether reforms extend adoption beyond regulated funds.
