The SEC is revisiting a U.S. crypto custody rule for investment advisers that the previous administration failed to finalize. In 2023 the regulator attempted to narrowly limit where advisers could hold client crypto assets, but the new initiative remains largely undisclosed.

— The U.S. Securities and Exchange Commission is again pursuing a crypto‑custody framework for advisers, having submitted its latest draft to the White House for review.

— Following an earlier attempt that did not survive under former Chair Gary Gensler, the agency is now taking initial steps toward a proposed rule that is expected to be more industry‑friendly and aimed at “removing burdens” from existing regulations.

The SEC’s prior effort to tighten controls over where investment advisers could store client crypto assets did not succeed.

Now the agency is giving crypto safeguarding another try, seeking to answer the industry’s pressing questions about complying with current custody rules for crypto assets. The SEC took the preliminary step this week of sending the concept to the White House Office of Management and Budget, where it will undergo review before a formal proposal can be issued.

The SEC described its forthcoming effort as one that “would improve and modernize the regulations governing the custody of investment adviser client and fund assets, including crypto assets,” according to the agency’s public regulatory agenda.

Besides clarifying the rules for a fast‑growing market, the pending proposal would “remove burdens from certain outdated provisions that are no longer necessary for investor protection given the evolution of markets and the ways securities are traded and held.”

The wording does not yet reveal the exact shape of the rule, but the tone indicates the SEC intends to continue making it easier to conduct crypto business in the United States.

However, the issue has been contentious before.

When the agency unveiled its 2023 custody proposal, then‑Chair Gary Gensler warned the crypto sector: “Make no mistake: Based on how crypto platforms typically operate, investment advisers cannot rely on them as qualified custodians,” referring to the planned expansion of the custody regulations.

That proposal would have compelled advisers to place client cryptocurrency with a limited list of “qualified custodians,” generally meaning a chartered bank or trust company, a broker‑dealer registered with the SEC, or a futures commission merchant overseen by the Commodity Futures Trading Commission.

A diverse group of financial firms, crypto platforms, and even another regulatory agency objected to the SEC’s approach. Senior counsel at the Small Business Administration told the securities regulator that the agency’s effort “drastically underestimates potential impacts” that could drive smaller advisers out of business.

Investment firm a16z labeled the plan “illegal, infeasible, and dangerous.”

The proposal never received final approval before Gensler departed and was withdrawn last year.

Current SEC Chair Paul Atkins has made crypto‑friendly regulation a hallmark of his tenure, and clarifying custody procedures is one component of that agenda. Since the 2023 attempt, the crypto industry has secured a wave of new federal trust bank charters, allowing many more institutions to handle such assets.

The SEC’s agenda additionally includes a near‑term proposal to clarify crypto compliance obligations for broker‑dealers.

Regarding timing, the disclosure points to an October window for the custody proposal, though such estimates can be optimistic. For example, the Reg Crypto initiative was slated for April on the agenda but emerged in August, and past SEC forecasts have sometimes missed the mark by more than a year—or failed to materialize altogether.

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Why it matters: Anvil is a shared on‑chain collateral layer built on a programmable letter of credit: reserve assets serve as a guarantee—no loan, no interest, retain custody and yield.