SEC’s Crypto Task Force Lawyer Outlines Path Forward On Custody Rules

The Securities and Exchange Commission’s incoming custody rules for crypto assets are aimed at helping traditional financial firms grow comfortable holding and transacting digital assets, according to Taylor Lindman, chief counsel of the agency’s Crypto Task Force.

Custody Proposal Under White House Review

Speaking at a Washington policy event, Lindman said the SEC’s custody proposal, which covers both investment firms and broker dealers, is currently under review by the White House Office of Management and Budget. The rule is designed to clarify how broker-dealers can hold non security crypto assets without needing special registration, and to give investment advisers clear guidance on where client assets can be stored, including through state-chartered trusts.

Agency Aims To Build Comfort With Blockchain

Lindman described the broader goal as helping existing securities market participants become comfortable using blockchain technology and holding both security and non security crypto assets. He pointed to earlier agency guidance, including a staff statement from December meant to guide broker-dealers ahead of formal rules, and a 2025 decision allowing investment advisers to use state chartered trusts as qualified crypto custodians.

A Different Approach From Previous Leadership

The SEC’s earlier attempt at a custody rule in 2023 stalled under previous leadership, which had argued crypto firms themselves weren’t qualified to custody digital assets. That effort was abandoned following a change in the agency’s leadership. Lindman described the current wave of crypto related rulemaking, including proposals on token offerings and tokenized securities, as necessary but often unglamorous foundational work meant to create a lasting regulatory framework.