The US Securities and Exchange Commission has proposed new rules that could make it easier for investment advisers and regulated funds to hold bitcoin and other digital assets for their clients.

The proposal would create a clearer framework for digital custody, including allowing advisers to hold some digital assets themselves when no approved custodian is available.

It would also allow state-chartered trust companies to serve as custodians for bitcoin.

The SEC says its current custody rules were written for traditional financial assets and have not kept up with the growth of digital assets.

“Since the advent of Bitcoin in 2008, the crypto asset market has grown from a niche curiosity into a multi-trillion-dollar asset class,” SEC Chairman Paul Atkins said. “Unfortunately, our rules and regulations have not kept pace.”

Investment advisers that hold assets for clients generally have to use a qualified custodian, such as a bank or registered broker-dealer.

That requirement can be difficult for Bitcoin because not every custodian supports every digital asset. Some digital assets may have no approved custodian capable of holding them.

The SEC's proposal would give advisers another option in those cases: self-custody.
But this would not mean advisers could simply keep clients' bitcoin in a personal wallet and operate it however they wanted.

Under the proposal, an adviser would first have to determine in writing that no qualified custodian is willing to hold the particular digital asset. That decision would have to be reviewed at least every three months.

If a qualified custodian becomes available, the adviser would have to move the asset to that custodian as soon as reasonably practicable.

The adviser would also need strong security measures. At least two authorized people would have to approve transfers, client assets would have to be kept in separate digital wallet addresses, and the adviser would need regular cybersecurity reviews.

The SEC would also require an independent accountant to review the adviser's custody controls.

One of the more important parts of the proposal concerns private keys. The SEC says an adviser would be considered to have self-custody if it possesses any part of a client's private-key material.

That means an adviser could not simply hold one part of a key while a custodian, client or outside wallet company holds another part. The proposal therefore does not create a simple hybrid model in which an adviser and a third party jointly control the same private key.

The rules would also require advisers using self-custody to have systems that prevent unauthorized access to private keys and require multiple people to approve transfers.
These requirements could make self-custody expensive, particularly for smaller investment firms.

The SEC is also proposing to expand the list of institutions that can legally act as digital asset custodians. State-chartered trust companies would be allowed to serve as qualified custodians for bitcoin and digital assets if they meet certain requirements.

Advisers and funds would have to check that these companies are properly authorized, have appropriate security policies and maintain adequate financial and internal controls.

The proposal builds on SEC staff guidance issued in 2025 that allowed advisers and funds, under certain conditions, to treat some state trust companies as banks for digital asset custody purposes.

The new proposal would replace that temporary approach with formal rules.

The proposal does not say that bitcoin or any other specific digital asset will be approved for adviser custody. However, Bitcoin could be one of the biggest beneficiaries because institutional custody infrastructure for it is already well developed.

US spot bitcoin ETFs held about $108 billion as of September 25, 2026, compared with $17.8 billion for spot Ethereum ETFs. Solana funds held about $2 billion, while XRP funds held around $1.8 billion.

Those numbers show that Bitcoin already has a large lead among digital assets in regulated investment products.

If the SEC's proposal becomes final, advisers are therefore likely to have an easier time accessing assets that major custodians already support.