SEC Crypto Rules Target Custody and Tokenized Securities

The SEC is moving toward more detailed rules for crypto custody, tokenized securities and digital-asset issuance, as crypto becomes more integrated with traditional finance. The proposed SEC crypto custody rules would set requirements for registered investment advisers and regulated funds that hold crypto assets, and update recordkeeping and reporting. Public comments are open until December 7, 2026. Tokenized securities are also a fiscal 2027 examination priority. The SEC plans to assess risks as traditional securities move onto blockchain infrastructure. In September, the agency introduced an Innovation Exemption that allows certain venues to facilitate blockchain-based stock trading under temporary relief. The initiative has drawn interest from trading firms, while at least 22 companies have objected to a planned tokenization platform backed by OKX and Intercontinental Exchange. Separately, the SEC is considering Regulation Crypto Assets, which would create exemptions for some investment-contract offerings: up to $5 million over four years and up to $75 million over 12 months, subject to conditions. A conditional safe harbor could also clarify when qualifying tokens fall outside the investment-contract definition. Together, the SEC crypto rules signal a shift from broad uncertainty toward specific requirements for custody, tokenized markets and fundraising. Greater clarity could support institutional participation over time, but compliance costs and enforcement risks remain important considerations for crypto firms and traders.