The U.S. Securities and Exchange Commission has issued two crypto-specific rulemaking proposals in 45 days — the 402-page Regulation Crypto Assets (RCA) on August 18 and a tailored custody framework for registered investment advisers (RIAs) and funds on October 1. Together, they constitute the SE...
The U.S. Securities and Exchange Commission has issued two crypto-specific rulemaking proposals in 45 days — the 402-page Regulation Crypto Assets (RCA) on August 18 and a tailored custody framework for registered investment advisers (RIAs) and funds on October 1. Together, they constitute the SEC's first formal notice-and-comment rulemaking dedicated to digital assets. The RCA comment deadline is October 20, 2026. The custody proposal opens a separate 60-day window.
The timing carries institutional risk. Commissioner Hester Peirce, who led the SEC's Crypto Task Force since February 2025, departed the agency on October 2, 2026, leaving the Commission with two sitting members — Chair Paul Atkins and Commissioner Mark Uyeda — both Republican appointees. No nominees for the three vacant seats have been announced. The SEC changed its quorum rules earlier in 2026 to allow one or two commissioners to constitute a quorum, a procedural backstop that may now be tested on consequential rulemaking.
The SEC published RCA in the Federal Register on August 21, 2026. The proposal creates three mechanisms:
Two offering exemptions. The first permits offerings of up to $5 million over four years — a startup-stage carve-out. The second, modeled on Regulation A+, permits offerings of up to $75 million in any 12-month period across two tiers: Tier 1 caps at $20 million (with $6 million from affiliate selling securityholders), Tier 2 at $75 million ($22.5 million from affiliates). Both require principles-based disclosure covering the investment contract, the crypto asset, management conflicts, network architecture, source code, tokenomics, governance, and risk factors.
A safe harbor from the "investment contract" designation. An issuer may exit the securities framework if it has (a) permanently ceased all essential managerial efforts undertaken pursuant to the investment contract, (b) made no new representations regarding such efforts, and (c) filed a public certification of compliance. This addresses the long-standing problem of tokens that launched as securities but evolved into decentralized networks.
State preemption. The proposal creates a pathway to preempt state securities registration for certain offerings and secondary-market transactions, reducing the patchwork of 50-state compliance that has burdened smaller issuers.
Eligibility is restricted. Issuers must be organized in the United States, with a majority of executive officers or directors who are U.S. citizens or residents and more than 50% of assets located domestically.
Comments are due October 20, 2026. According to analysis from WilmerHale, final rules are not expected before Q1 2027 and may differ materially from the current proposal.
On October 1, 2026, the SEC proposed amendments to custody rules under the Investment Advisers Act and the Investment Company Act. The core changes:
Self-custody under conditions. RIAs and business development companies may self-custody crypto assets, subject to safeguarding, controls, and audit requirements. This is not unrestricted permission — it is conditional self-custody with ongoing compliance obligations.
Expanded qualified custodian definition. State-chartered trust companies may serve as qualified custodians for crypto assets. The final definition will determine whether Bitcoin-native custody firms or only large bank custodians benefit from the new regime.
Practical barrier removed. SEC Chair Paul Atkins stated that existing custody rules "were designed to protect the assets of advisory clients and regulated funds from loss, theft, misuse, and misappropriation" but "consider the custody and safekeeping only of traditional assets — an untenable situation in the 21st century."
The proposal opens a 60-day comment period following Federal Register publication. It is the second of three crypto-focused rulemakings the SEC listed in its 2026 Unified Regulatory Agenda, which also includes planned rules for onchain trading of tokenized securities.
The SEC has constructed its crypto regulatory architecture in three sequential layers since March 2026:
Layer 1: Classification (March 17, 2026). The SEC and CFTC issued a joint 68-page interpretive release establishing a five-category token taxonomy: digital commodities, digital collectibles, digital tools, stablecoins, and digital securities. The release identified 18 major cryptocurrencies as examples of digital commodities and clarified that protocol staking, mining, wrapping, and airdrops generally do not constitute investment contracts. This replaced the SEC's 2019 staff-level digital asset framework and is binding on both agencies' enforcement and supervisory staff.
Layer 2: Capital formation (August 18, 2026). Regulation Crypto Assets provides a tailored offering regime so token issuers can raise capital without full Securities Act registration, provided they meet disclosure and eligibility requirements.
Layer 3: Custody (October 1, 2026). The custody proposal allows the institutional capital management industry to hold and safeguard crypto assets under federal securities law.
The logic is sequential: classify what is and is not a security, then provide a way to offer securities-classified tokens, then let regulated advisers hold them. Whether this stack holds together depends on whether final rules survive the comment process and legal challenges — and whether the Commission retains enough personnel to finalize them.
Hester Peirce's departure on October 2 reduces the SEC to two commissioners. The Securities Exchange Act mandates five commissioners with no more than three from a single party, alternating nominations "as nearly as may be practicable."
Three seats are now vacant. Democratic Commissioner Caroline Crenshaw departed in January 2026. Jaime Lizárraga resigned in January 2025. On July 10, 2026, a White House official stated it had asked Senate Democrats for recommended nominees but had not received names.
The SEC changed its quorum rules in 2026 to allow one or two commissioners to constitute a quorum, a move that drew criticism from governance observers. According to reporting from The Lever, the rule change permits a single commissioner to act alone — an untested governance scenario for an agency overseeing $100+ trillion in capital markets.
For crypto rulemaking specifically, the gap creates execution risk. The RCA comment period closes October 20 — 18 days after the commissioner who led the Crypto Task Force left the building. The custody comment period will close approximately 60 days after Federal Register publication. Converting proposed rules to final rules requires Commission votes. Two commissioners can technically proceed, but any contested rulemaking on a 2-0 party-line vote faces elevated legal challenge risk.
The SEC's rulemaking sprint occurs against a backdrop of congressional inaction on market structure. The CLARITY Act — the market-structure companion to the GENIUS Act (signed July 18, 2025) — passed the House in July 2025 but has stalled in the Senate.
Timeline:
SEC Chair Atkins acknowledged the gap in a July 27, 2026 CNBC interview, stating the SEC is "ready, willing and able to come out with rules that address the same issues in CLARITY and other aspects of crypto market," positioning the agency's rulemaking as a fallback if legislation fails.
This creates a jurisdictional tension. The GENIUS Act addressed stablecoins. The CLARITY Act was intended to draw the line between SEC and CFTC jurisdiction over non-stablecoin crypto assets. Without it, the SEC-CFTC joint interpretive release from March 2026 — a non-legislative, agency-level framework — serves as the operative jurisdictional boundary. That boundary has not been tested in court.
The custody proposal's significance is measured in addressable capital. According to SEC filings, registered investment advisers manage over $100 trillion in client assets. Grayscale estimates that less than 0.3% of total U.S. wealth management intermediary assets — approximately $40 trillion — are allocated to crypto.
U.S. spot crypto ETFs held $108 billion in Bitcoin funds, $17.8 billion in Ethereum funds, $2 billion in Solana funds, and $1.8 billion in XRP funds as of September 25, 2026. Nearly 45% of financial advisors report plans to gain crypto exposure through ETFs, according to Grayscale's 2026 Digital Asset Outlook.
The custody proposal addresses a structural bottleneck: advisers who want to allocate client capital to crypto assets beyond ETFs — including direct token exposure, DeFi yields, or tokenized securities — have lacked a compliant custody pathway. The proposed rules do not guarantee allocation will follow, but they remove a prerequisite barrier.
The economic value question — who captures fees from this custody chain — remains open. Whether state trust companies, bank custodians, or crypto-native firms win the qualified custodian designation will determine how custody revenue distributes across the financial stack.
The SEC has moved from enforcement-led crypto policy to formal rulemaking in seven months — a pace without precedent at the agency. The three-layer architecture (classification, capital formation, custody) provides logical coherence. Whether it produces durable regulation depends on three variables: the comment process, the Commission's capacity to finalize rules with two members, and whether courts uphold agency-made frameworks in the absence of congressional legislation.
The departure of Peirce removes the most experienced crypto-focused commissioner at the moment the rulemaking enters its most contested phase. The agency has constructed the procedural scaffolding. Completing the building is a different problem.