Next for the U.S. SEC: Agency's chief crypto counsel illuminates path for custody

WASHINGTON, D.C. — As the U.S. Securities and Exchange Commission is blazing through much of its crypto agenda, trying to nail down a U.S. regulatory structure in the absence of a solution from Congress, its rules for the proper custody of crypto assets are coming soon.

The SEC has a proposal for custody for investment firms under White House review and one for broker-dealers in the pipeline, and Taylor Lindman, chief counsel of the SEC's Crypto Task Force, said the effort is meant to allow the market to "understand how you can carry a non-security crypto asset within a broker-dealer without needing some special registration" and to make clear for investment advisers where they can park client assets, such as in a state-chartered trust.

"The big picture with this is we're trying to assimilate the existing securities intermediaries and our existing market participants into a world where they feel comfortable utilizing blockchain, even holding crypto assets, transacting crypto assets, and that includes crypto assets that are securities as well as crypto assets that are non-securities," Lindman said Tuesday at the CoinDesk Policy & Regulation event in Washington.

Once the investment advisers’ proposal is cleared by the Office of Management and Budget at the White House, the agency can formally propose it and take comment from the industry and public. The other for broker-dealers is on the agenda but not yet under review.

Meanwhile, Lindman cited the agency's staff statement in December that was meant as an interim approach to steer broker-dealers on how they should handle crypto custody until the rules are in place, and he also referenced its move in September 2025 to allow investment advisers to park customer assets with state-chartered trusts as qualified crypto custodians.

The SEC's previous effort to pursue a custody rule in 2023 was under a decidedly different regime, and then-SEC Chair Gary Gensler said that crypto firms themselves wouldn't qualify to custody the assets. That rule for advisers, though, never moved to final form and was scrapped when President Donald Trump returned to the White House and appointed crypto-friendly leadership at the regulator.

Speaking more broadly of the agency's crypto agenda, which has recently included a proposed rule to allow for crypto offerings and a new exemption to clear the way for tokenized securities, Lindman characterized the work as "foundation laying," adding that "some of the foundation laying is boring."