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- SEC custody amendments are under OIRA review and could be published by October 2026.
- Institutional Bitcoin ETF holdings rose 7.5% to 535,723 BTC in Q2 2026 despite Bitcoin’s decline.
- Custody fees, insurance costs and compliance burdens remain potential barriers to wider institutional adoption.
The U.S. Securities and Exchange Commission (SEC) is moving closer to revisiting how customer cryptocurrency should be safeguarded, putting custody rules back in focus as regulators weigh broader changes to the digital-asset market.
On August 25, the SEC submitted proposed amendments to its Custody Rule to the Office of Information and Regulatory Affairs (OIRA), which reviews economically significant regulations. The proposal is now under White House review, meaning the SEC has not yet released the amendments publicly or opened them for industry compliance.
SEC custody proposal enters White House review
The SEC’s decision comes shortly after a White House meeting involving President Donald J. Trump and cryptocurrency executives, as U.S. regulators continue working on a broader framework for digital assets.
Because the proposed custody amendments have been classified as economically significant, SEC commissioners cannot vote on or publicly disclose details of the rulemaking until the OIRA review is complete.
The SEC expects the proposed rule to be published no later than October 2026. Once published, the public would have at least 60 days to submit comments.
That timeline means the latest development should not be interpreted as an immediate regulatory change. The proposal must still undergo analysis and receive another commission vote before it can become effective.
Custody reform could lower an institutional barrier
The proposed changes could eventually clarify what regulators expect from crypto custodians, potentially addressing one of the obstacles facing institutions seeking greater exposure to digital assets.
Institutional demand has already shown resilience despite weaker Bitcoin prices. During the second quarter of 2026, institutional holdings through Bitcoin ETFs increased 7.5% to 535,723 BTC, even as Bitcoin declined 14.2%.
Institutional ownership also climbed to 44.2%, compared with 38.4% previously. At the same time, overall ETF holdings fell 6.6% to 1.21 million BTC, highlighting a divergence between institutional accumulation and broader ETF positioning.
Costs remain a challenge
Regulatory clarity alone may not eliminate the costs associated with institutional crypto custody. Custody fees can range from roughly four to 15 basis points annually, while insurance coverage can vary between $200 million and $750 million.
Those expenses could weigh more heavily on smaller investment advisers, which may face higher compliance costs relative to their size.
Ultimately, future ETF and investment filings will offer a clearer indication of whether custody reform translates into broader institutional participation.
Also Read: Coldcard Releases Critical Security Update After $112M Bitcoin Exploit
The SEC’s custody proposal marks an important step toward defining how customer crypto assets should be protected, but the process remains far from complete. With OIRA review, public consultation, further analysis and another SEC vote ahead, implementation could take years. For now, investors and industry participants are watching to see whether the reforms deliver enough clarity to encourage wider institutional adoption.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
