On Oct. 1, the U.S. Securities and Exchange Commission (SEC) unveiled a custody framework designed to allow investment advisers and regulated funds to hold cryptocurrencies under tailored regulations.
This measure represents the most recent in a series of nine regulatory moves by the agency initiated since Aug. 18, addressing nearly every stage of a digital asset’s lifecycle—from initial fundraising to secure storage. Two of these initiatives preceded the Senate’s 49-50 vote on Sept. 15 to reject cloture on the CLARITY Act (falling short of the 60 votes needed), while seven followed starting Sept. 17.
These actions currently hold varying legal standings, ranging from active exemptions to pending White House reviews, which ultimately dictate what crypto enterprises can implement today.
Raising money and defining the rules for crypto
Released on Aug. 18 ahead of the Senate vote, the SEC’s Regulation Crypto Assets proposal seeks to establish an issuance pathway for specific crypto-based investment contracts.
The proposal outlines exemptions permitting up to $5 million raised across four years and up to $75 million within a 12-month timeframe, alongside a conditional safe harbor shielding projects from the investment-contract classification. Public comments on this proposal remain open through Oct. 20.
Additionally, SEC Corporation Finance staff issued FAQs on Sept. 25 addressing token utility, decentralization, staking receipt tokens, promotional activities, ongoing ecosystem development, buybacks, and secondary-market promotion. These were subsequently updated on Sept. 28.
Characterized by the SEC as staff interpretations that leave existing laws unchanged, these FAQs offer industry participants a comprehensive guide regarding how officials evaluate investment contracts.
Issued prior to the vote on Sept. 1, a separate transfer-agent proposal targets electronic and blockchain-based recordkeeping alongside uncertificated securities. This proposed overhaul of the shareholder-registry layer underpinning tokenized securities remains at the proposal stage.
Trading, routing and collateral
On Sept. 17, the SEC implemented its Innovation Exemption—a conditional, five-year directive allowing eligible Tokenized Securities Venues to facilitate the trading of tokenized National Market System (NMS) stocks via permissioned automated market makers and liquidity pools.
Under this temporary and strictly scoped exemption, qualifying liquidity providers are granted conditional dealer relief for tokenized equities on approved platforms.
Concurrently, Commodity Futures Trading Commission (CFTC) staff issued a no-action letter covering passive software developers that link users to registered derivatives markets and futures commission merchants. Wallets and user interfaces now possess a more transparent pathway to integrate with regulated derivatives markets, provided they meet outlined criteria.
As a staff-level directive, this relief carries less legal weight than a formal Commission rule or federal statute.
On Sept. 24, CFTC staff refreshed its digital asset and blockchain FAQs to incorporate customer-funded investments in tokenized traditional assets and the application of distributed ledger technology to satisfy specific recordkeeping obligations.
Through these measures, tokenization extends beyond mere trading activity into the core operational infrastructure of regulated financial institutions.
Clearing and custody for crypto
The CFTC approved the registration of Coinbase Clearing LLC as a derivatives clearing organization on Sept. 28, authorizing the entity to clear fully collateralized futures, options on futures, and swaps. This authorization extends regulated, crypto-native infrastructure directly into the clearing domain.
The SEC’s Oct. 1 custody proposal establishes a dedicated framework for registered investment companies, investment advisers, and other regulated entities. It provides provisions for self-custody under specific conditions, permits state trust companies to act as custodians for client and fund digital assets, and broadens the scope of permissible crypto strategies for regulated funds.
SEC Chairman Paul Atkins characterized the framework as a compliant custody route where none previously existed. The public comment period spans 60 days following publication in the Federal Register, and all proposed elements remain conditional until a final rule is enacted.
What works today, and the piece at the White House
Four regulatory components are immediately operational: the Innovation Exemption, the CFTC’s passive-software relief, the CFTC FAQ updates for covered registrants, and the registration of Coinbase Clearing.
Conversely, the Regulation Crypto Assets proposal, the transfer-agent modernization, and the custody framework require final rulemaking before they can be formally adopted, with the SEC FAQs serving as interpretive guidance. The final major component is the CFTC’s overarching market framework.
That framework, formally designated as “Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets,” was submitted for White House review on Sept. 17. Tracked by the Office of Information and Regulatory Affairs (OIRA) under RIN 3038-AF80 as a pre-rule received on that date, its specific text remains unpublished. It focuses on the market perimeter, marking the boundary where the regulatory stack concludes.
By contrast, the CLARITY Act would have formally divided jurisdiction between the SEC and the CFTC while introducing comprehensive, market-wide regulations for the secondary trading of digital commodities—responsibilities that currently remain with Congress.
While regulatory bodies continue to issue exemptions, registrations, and interpretive releases—such as the joint SEC-CFTC guidance issued in March clarifying how securities laws apply to select crypto assets—Atkins noted on Aug. 18 that the Innovation Exemption’s five-year lifespan highlights the ongoing necessity of legislation to guarantee durable rules that survive future regulatory shifts.
What the stack means for Bitcoin
Elements such as custody, adviser accessibility, exchange-traded fund (ETF) flows, derivatives routing, collateral infrastructure, and clearing mechanisms intersect directly with Bitcoin, whereas offering regulations primarily impact token issuers.
With Bitcoin hovering near $84,600, Citi revised its 12-month price target upward from $82,000 to $113,000, pointing to sustained ETF inflows alongside steady increases in adviser and brokerage capital allocation.
A CoinShares survey conducted in August indicated that digital asset allocations rose to 1.2%—marking the first upward shift since the market sell-off in October 2025—with survey respondents identifying regulatory clarity as their primary concern.
Should the pending custody, transfer-agent, and token-offering proposals finalize in alignment with the CFTC’s forthcoming market framework, issuance, trading, collateral management, clearing, and custody functions would operate under a unified regulatory standard.
This harmonization would facilitate the wealth adviser and brokerage allocations projected by Citi, while aligning with the bank’s broader tokenization forecasts, which project market sizes between $2.7 trillion and $8.2 trillion by 2030.
Conversely, if regulatory proposals encounter delays, litigation, or significant revisions while the CFTC framework remains stalled, market participants would continue relying on existing standalone exemptions and no-action relief.
Under that scenario, the market perimeter would depend largely on staff interpretations and administrative guidance. Potential shifts in future political administrations or judicial challenges could restrict these current pathways, steering market outcomes toward the lower end of Citi’s projected Bitcoin range.
Over a span of roughly six weeks, federal agencies have advanced policies addressing everything from how projects originate funding to how institutional investors manage their holdings, leaving the definitive statutory boundary between the SEC and CFTC unresolved.