The U.S. Securities and Exchange Commission (SEC) has taken a procedural step toward rewriting how investment advisers and investment companies handle client custody rules—potentially including clearer guidance for crypto asset custody. The agency’s proposal was submitted on Aug. 25 to the Office of Information and Regulatory Affairs (OIRA), where it will undergo review by the White House Office of Management and Budget before returning to the SEC and, if approved, being opened for public comment.

According to the SEC’s regulatory agenda, the rules are intended to reduce uncertainty over how regulated firms may hold crypto for clients while complying with federal securities requirements tied to the Investment Advisers Act and the Investment Company Act. The SEC has not yet published the full proposal for public view, and OIRA retains the ability to request revisions before the SEC considers whether to advance the draft.

Key takeaways

• The SEC submitted “Amendments to the Custody Rules” to OIRA on Aug. 25, a necessary step before any potential public rulemaking.
• The proposal would address custody practices for investment advisers and funds, including how those entities may custody crypto assets for clients.
• The agency says the intent is to clarify compliance expectations and reduce uncertainty currently affecting institutional crypto custody.
• The broader context includes the SEC’s shift toward rulemaking under current leadership, as the CLARITY market-structure bill faces delays in Congress.

OIRA review marks a new phase for custody-rule changes

Under the U.S. regulatory process, submissions to OIRA are typically part of the administration’s review pipeline, which includes assessing potential economic impacts and other policy considerations. The SEC’s regulatory agenda indicates it is considering either amendments to existing custody rules or new provisions under the Investment Advisers Act and Investment Company Act.

The SEC’s agenda framing highlights compliance clarity as the core objective: institutions have needed more predictable standards for how they can custody digital assets while meeting securities-law obligations. Still, the proposal has not yet been released, so investors and service providers will have to wait to see the exact custody mechanisms and compliance conditions the SEC is considering.

The timeline also matters. Even after the OIRA review, the SEC must decide whether to issue the draft publicly for comment. In the meantime, the drafting remains in a pre-public phase, leaving the precise details—such as how the SEC plans to define permissible custodial arrangements for crypto—unknown.

Why crypto custody rules are now a focal point

Institutional participation in crypto markets has long been tied to custody infrastructure and compliance. Custody is not simply a technical function; it’s also a legal and regulatory question tied to fiduciary duties and the requirement to protect client assets. By exploring custody-rule changes for investment advisers and investment companies, the SEC is effectively aiming to address a practical bottleneck: when custody standards are ambiguous, regulated firms may be more cautious about offering crypto exposure to clients—or they may rely on arrangements that are harder to defend under existing guidance.

The SEC’s stated intent—to clear up uncertainty—suggests that regulators view the current framework as insufficiently clear for modern portfolio practices that increasingly include crypto. However, the proposal is still preliminary, and the fact that it is under review means the agency could adjust its approach after OIRA feedback.

Rulemaking momentum under SEC leadership

Multiple developments point to a broader strategic shift at the SEC. Since Paul Atkins became chair in 2025, the agency has increasingly emphasized formal rulemaking over what it previously treated as “regulation through enforcement.” Atkins pledged to change course by using established rulemaking channels to set industry expectations rather than relying primarily on enforcement actions to define the regulatory boundary.

That strategic shift is also reflected in past enforcement posture. Earlier coverage noted that the SEC dismissed several cases against major crypto companies in 2025, including its lawsuit against Coinbase, as it moved to reshape its approach to digital assets.

While the custody-rule proposal is not itself an enforcement action, it aligns with the same direction: creating clearer standards that regulated firms can plan around. If the SEC ultimately issues the draft for public comment and it advances to final rulemaking, the result could materially affect institutional compliance planning for advisers and investment funds that want to include crypto in client portfolios.

Congressional bill delays keep regulatory uncertainty in focus

The SEC’s custody initiative is unfolding while at least one other major policy effort remains stalled. As Bloomberg reported, the proposed rule is part of the agency’s broader push to advance the Trump administration’s digital asset agenda as the CLARITY market structure bill remains blocked in the Senate.

Earlier reporting from Cointelegraph noted that the CLARITY bill was expected to face a cloture vote after lawmakers return from the August recess in September. With that legislative path uncertain, regulatory clarity on custody and compliance could take on added importance for market participants—even if it comes through the SEC’s rulemaking process rather than Congress.

In other words, while the legislative debate over market structure continues, the SEC is also working on narrower but highly practical rules that govern how investment firms hold assets. For institutions, that distinction can matter: the ability to custody crypto within a clear regulatory framework may be a nearer-term determinant of product development and client offering viability.

What to watch next

Readers should focus on whether the OIRA review prompts changes to the draft and, crucially, whether the SEC eventually releases the custody proposal for public comment. The most important unknown is what specific custody standards the SEC will propose for crypto holdings, since that will determine how institutions adjust compliance processes and custodial arrangements.

Chainalysis estimates that potentially taxable crypto activity on major public blockchains reached at least $457 billion worldwide in 2025. But the firm argues that current international tax reporting rules will likely capture only a minority of that activity—leaving most onchain activity outside the data flows tax authorities can use.

In Chainalysis’ figures, the United States accounted for an estimated $112.6 billion, while North America led all regions with $134.6 billion. The European Union followed with $125.1 billion. The analysis focuses on realized gains, income from activities such as mining, staking and lending, and crypto-denominated payments across six major blockchains—while excluding activity conducted within centralized exchanges.

Key takeaways

• Chainalysis pegs potentially taxable onchain activity in 2025 at $457 billion globally, but most of it falls outside OECD’s Crypto-Asset Reporting Framework (CARF).
• CARF-covered transactions account for an estimated 14% of the taxable onchain activity Chainalysis identified, with 86% occurring beyond the reporting perimeter.
• The $457 billion estimate includes realized gains and onchain income streams (e.g., staking, lending) and payments, but intentionally leaves out centralized exchange trading activity.
• CARF requires covered providers to collect customer transaction and tax residency information and share it with tax authorities for cross-border exchange.
• Decentralized finance activity may remain largely uncovered because CARF is built around identifiable intermediaries and reporting obligations tied to centralized service providers.

A global onchain tax problem dwarfs what CARF can cover

Chainalysis’ report frames a central mismatch: taxable crypto behavior is heavily onchain and fragmented, while reporting obligations under CARF are structured around intermediaries that can be required to collect and report data.

According to Chainalysis, transactions that fall under CARF account for just 14% of the potentially taxable onchain activity it identified. The remaining 86% includes activity on decentralized exchanges, peer-to-peer transfers, onchain income streams, and crypto-denominated payments—types of activity that may not be routed through centralized, in-scope reporting entities.

This distinction matters for investors and market participants because tax outcomes depend on record availability. Even where taxable events occur on public blockchains, the ability for tax authorities to receive consistent third-party transaction information is limited when reporting requirements don’t extend to the underlying counterparties or decentralized infrastructure.

How CARF is meant to work—and when it starts

CARF was developed by the Organisation for Economic Co-operation and Development (OECD) and announced as a framework for reporting crypto-related customer transaction data to tax authorities. Under CARF, covered crypto service providers collect customer and tax residency information and report transaction data to their domestic authorities, which can then share information across borders.

In practical terms, Chainalysis points to a coverage design that focuses on intermediaries. CARF collection is set to begin on Jan. 1, 2026, in 48 jurisdictions, including the United Kingdom and European Union. For covered platforms, the framework also requires collecting additional customer and tax residency information from that date.

Investors should note that the start date is tied to reporting obligations placed on “covered” providers. The existence of a reporting framework does not automatically mean all onchain activity becomes reportable—coverage depends on whether transactions are processed through entities that fall within CARF’s defined perimeter.

Why DeFi may stay largely outside the reporting perimeter

A key reason for CARF’s limited coverage, Chainalysis suggests, is that CARF is oriented toward crypto intermediaries that facilitate transactions as a business. Colby Mangels, a former OECD adviser who worked on CARF, told Cointelegraph in January that the framework was designed around intermediaries that can be regulated and required to report.

That structure creates friction for decentralized finance. Much DeFi activity may involve no centralized operator in the traditional sense, and potentially no custodial relationship that triggers reporting obligations in the way CARF expects. As a result, decentralized exchanges, peer-to-peer transfers, and various onchain income mechanisms can remain outside direct reporting.

Still, the regulatory landscape is not static. Mangels said tax authorities are watching how anti-money laundering rules evolve, including efforts to determine when DeFi platforms—or their operators—could be treated as regulated crypto service providers. If and when that happens, the boundary between “covered” intermediaries and “uncovered” decentralized activity may shift.

What to watch next as reporting expands

Chainalysis’ estimates highlight an uncomfortable reality: even with CARF rolling out across dozens of jurisdictions, a large portion of taxable onchain activity may remain invisible to tax authorities unless reporting requirements extend to additional kinds of entities or data-generating processes. What matters next is how regulators decide whether and when decentralized platforms—or people operating them—become subject to the same reporting duties as centralized intermediaries.

Readers should watch the implementation details in CARF jurisdictions after the Jan. 1, 2026 rollout begins, as well as any regulatory movement that clarifies how DeFi participants fit into the “crypto service provider” concept. Those determinations will largely determine whether the 14% coverage figure can rise—or whether the reporting gap persists.

The U.S. government has transferred a small amount of Bitcoin seized from Alameda Research’s Binance.US accounts three years ago, renewing attention on how federal agencies will handle the remaining assets.

Arkham Intelligence reported the transaction on Aug. 26, describing the amount as small and tracing the Bitcoin to Alameda accounts on Binance.US that U.S. authorities seized three years earlier.

The blockchain analytics firm did not publish the amount in its indexed post or identify the receiving address. Arkham also did not say that officials had sold the Bitcoin, leaving the transaction’s purpose unconfirmed.

“The US Government just moved a small amount of Bitcoin that had been seized from Alameda accounts on Binance US, 3 years ago,” Arkham said.

Arkham then asked whether the government would begin liquidating the remaining Bitcoin connected to Alameda. The question was not tied to an announcement from the Department of Justice, the Treasury Department, or another federal agency.

The Bitcoin transfer does not confirm a sale

Moving Bitcoin between addresses records a change in custody or location on the blockchain, but the transaction alone does not show whether the asset has been sold. A transfer to another government wallet may involve custody, accounting, or security management, while movement to an exchange can make a future sale possible without proving one occurred.

The destination is especially important because federal agencies have regularly used Coinbase Prime to store and manage seized digital assets. Coinbase’s institutional platform offers both custody and trading services, meaning a deposit there can support several purposes.

In July, U.S. government-linked wallets transferred nearly $297 million in seized Bitcoin and Ether to Coinbase Prime. The transaction included about 3,940 BTC and 30,014 ETH tied to separate enforcement cases, according to earlier transaction coverage.

Bitcoin connected to Ryan Farace, an online drug dealer known as “Xanaxman,” and the closed BTC-e exchange formed part of the July transfer. Ether linked to a separate money laundering case also moved to Coinbase Prime.

No public blockchain record can show whether an exchange deposit resulted in an executed trade unless additional evidence reveals a conversion or movement of the sale proceeds. The same limitation applies to the latest Alameda-linked Bitcoin transaction.

Alameda assets have moved several times in 2026

Federal wallets have processed other seized assets tied to Alameda and FTX during 2026, providing a record of how authorities have handled smaller token holdings.

In May, Arkham said the government moved about $1.89 million in Render, Uniswap, The Sandbox, Mask Network, and Axie Infinity tokens to Coinbase Prime. The analytics firm traced the tokens to approximately $13 million in Alameda assets seized from Binance accounts more than three years earlier.

Another transaction followed in June, when government-controlled wallets transferred nearly $984,000 in FTX- and Alameda-linked cryptocurrency. At least $768,000 of the total went to Coinbase Prime, as crypto.news reported at the time.

Arkham said the June assets would go to the FTX estate to help repay creditors. The transaction included Chainlink and several smaller tokens, while the remaining amount moved through addresses connected to the same seized asset group.

Federal wallets had also moved more than $33 million in Alameda-linked cryptocurrency in December 2024. According to an Arkham report, the batch included about $18 million in Ether, $13 million in BUSD, and smaller amounts of Wrapped Bitcoin, Shiba Inu, and Axie Infinity.

Arkham said the 2024 assets moved to a newly created address and noted that no official purpose had been announced. The firm presented creditor distributions, wallet consolidation, and asset management as possible explanations rather than confirmed reasons for the transfers.

U.S. reserve rules limit some Bitcoin sales

President Donald Trump’s March 2025 executive order established the Strategic Bitcoin Reserve and directed the Treasury Department to fund it with Bitcoin finally forfeited through criminal or civil proceedings.

Under the order, Bitcoin deposited into the reserve cannot be sold and must remain a U.S. reserve asset. A recent Bitcoin reserve explainer estimated that the federal government held approximately 198,000 BTC as of mid-2026, although public trackers produce different totals based on the addresses and legal categories they include.

The White House order does not place every seized coin under an absolute ban on disposal. It allows agencies to return assets to verified victims, comply with court orders, support law enforcement operations, and meet requirements under federal forfeiture laws.

Legal status, therefore, determines how a particular holding can be handled. Bitcoin that has been finally forfeited and transferred into the reserve receives different treatment from property still involved in a court case, creditor recovery process, or victim compensation plan.

The White House also created a U.S. Digital Asset Stockpile for forfeited assets other than Bitcoin. Treasury has more room to manage or sell tokens held in the stockpile, while the order gives Bitcoin placed in the reserve a general no-sale policy.

No federal agency has said whether the Bitcoin moved on Aug. 26 had entered the reserve, remained assigned to the FTX recovery process, or fell under one of the order’s exceptions.

FTX creditors remain tied to the seized assets

Alameda Research operated as the trading firm associated with FTX before the exchange collapsed in November 2022. Federal prosecutors later said FTX founder Sam Bankman-Fried used customer deposits to finance Alameda’s operations, investments and loan repayments.

The Justice Department said Bankman-Fried misappropriated billions of dollars deposited by FTX customers and gave Alameda access to the funds. A federal jury convicted him in November 2023 on seven counts, including wire fraud, securities fraud conspiracy, commodities fraud conspiracy, and money laundering conspiracy.

In March 2024, U.S. District Judge Lewis Kaplan sentenced Bankman-Fried to 25 years in prison. The Justice Department said the sentence included forfeiture of more than $11 billion, while prosecutors placed FTX customer losses at more than $8 billion.

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