The Securities and Exchange Commission on Wednesday proposed a tailored framework governing how registered investment advisers and regulated funds can custody crypto assets, moving to settle one of the thorniest questions in institutional crypto: how professional money managers are supposed to hold the assets.

Advisers are required to keep client assets with "qualified custodians" that meet strict safekeeping standards, but it has long been unclear which crypto arrangements satisfy that bar. The ambiguity has left many firms hesitant to offer digital-asset strategies at all. The new proposal aims to replace years of regulatory uncertainty with a clear compliance path.

Issued under the Investment Advisers Act of 1940 and the Investment Company Act of 1940 — statutes written decades before crypto assets existed — the plan would ease that bottleneck in several ways. It would permit crypto assets to be held in self-custody under certain conditions, allow state trust companies to serve as custodians for client and fund crypto, and update rules around financial-statement audits for advisers and broker-dealer custodial services for funds.

The stated goal is to widen investor access to crypto strategies by removing barriers that have kept advisers on the sidelines. The proposal was unveiled in a press release published on the SEC's official website, which describes the measure as addressing how investment advisers and funds can custody crypto assets under federal law.

"Since the advent of Bitcoin in 2008, the crypto asset market has grown from a niche curiosity into a multi-trillion-dollar asset class to which investors actively seek exposure," SEC Chairman Paul Atkins said in a statement, adding that the agency's rules "have not kept pace" and that the proposal would replace "the grey of uncertainty created by custody rules crafted for a bygone era."

The custody plan is the latest piece of a sweeping regulatory build-out the SEC has pursued since the Clarity Act, legislation that stalled in the Senate. The agency has rolled out an "innovation exemption" letting tokenized stocks trade on-chain, proposed a crypto-fundraising framework dubbed Regulation Crypto Assets, and had staff clarify that token buybacks don't by themselves make a crypto asset a security.

Together, the moves reflect a broader shift in the United States, in which crypto has stopped waiting on Congress and instead leaned into the regulators — leaving agencies, rather than lawmakers, to write the fine print that will govern how digital-asset products reach mainstream investors.

The proposal is not final. A 60-day public comment period will open once it is published in the Federal Register, giving advisers, custodians, and other market participants formal window to weigh in. After that, the agency can revise the rules before any vote to adopt them — making the Federal Register publication date, the substance of the comments, and the shape of any revisions the milestones to watch as the framework moves through the rulemaking process.