By Lindsay Burckett-St Laurent, Senior Managing Director, Client Delivery, U.S. and Dan Miller, Senior Managing Director, Client Delivery, U.S.
For years, cryptocurrency has sat just outside the mainstream of institutional finance. Regulatory ambiguity, capital burdens and restrictive custody rules kept most institutions and alternative investment managers at arm’s length.
But that picture is changing rapidly. Under the current administration, U.S. regulators and lawmakers have moved at speed to define new “rules of the road” for digital assets. These changes are opening the door for banks, broker-dealers and investment advisers to participate in crypto markets in a compliant way.
The opportunity set is expanding, but so are regulators’ expectations. For managers, now is the time to review governance, risk and disclosure frameworks to ensure readiness for a more crypto-inclusive environment.
The U.S. regulatory landscape: Recent developments
OCC Interpretive Letter 1184
The Office of the Comptroller of the Currency confirmed that national banks can now provide crypto custody services in both fiduciary and non-fiduciary capacities. They can use sub-custodians, facilitate crypto-to-fiat settlements, and even support products such as loans using crypto as collateral.
Impact for managers: With banks like JPMorgan exploring crypto-backed loans, institutional-grade crypto solutions are becoming more accessible. But any counterparty you rely on will need to maintain robust cyber, risk management and vendor oversight frameworks – and you will, too.
Repeal of SEC’s SAB 121
SAB 121 had required custodians to carry their clients’ crypto assets on their own balance sheets, which was a costly deterrent for banks and trust companies. Its repeal removes that burden.
Impact for managers: More custodians are likely to enter the market, giving advisers more choice. This may also accelerate the development of regulated financing solutions tied to digital assets.
Withdrawal of 2019 broker-dealer custody guidance
The SEC and FINRA have formally withdrawn prior guidance that limited broker-dealers’ ability to custody digital assets. Broker-dealers can now custody non-security tokens like Bitcoin. In certain cases, self-custody is permitted.
Impact for managers: Broker-dealer custody now looks more like traditional frameworks, broadening the field of “qualified custodians.” But due diligence is critical: managers must confirm counterparties are properly registered and capable of safeguarding assets.
GENIUS Act (stablecoin framework)
The GENIUS Act, signed in July 2025, establishes the first federal framework for payment stablecoins. It requires 100% reserve backing, monthly public disclosures, consumer redemption rights, and priority claims in insolvency. Only banks, credit unions and OCC-licensed non-banks may issue stablecoins; foreign issuers must meet comparability standards.
Impact for managers: Stablecoins are gaining legitimacy as a payment instrument, but issuers will face ongoing audits and reporting obligations, and the firms using them will need to confirm issuer status and update disclosures accordingly. The reciprocity provisions also raise cross-border considerations for funds with international affiliates.
CLARITY Act (digital asset oversight): pending Senate approval
The CLARITY Act aims to settle a long-running jurisdictional debate between the SEC and the CFTC: who will oversee securities-like tokens, and who will regulate “digital commodities”? The bill provides for dual registration pathways and criteria for when an asset transitions from security to commodity status.
Impact for managers: SEC-registered advisers may also need to register with the CFTC, depending on their holdings. Offering documents, Form ADV/BD filings, custody practices and marketing disclosures will need to reflect these classifications once finalized.
Anti-CBDC Surveillance State Act: pending Senate approval
This bill would prohibit the Federal Reserve from issuing a central bank digital currency (CBDC) or offering direct-to-consumer Fed accounts, reflecting concerns about privacy and surveillance.
Impact for managers: This act would remove the near-term risk of mandatory CBDC integration into U.S. payment systems. Firms should review contracts, vendor agreements, and marketing materials to ensure they aren’t reliant on a U.S. CBDC assumption.
Impact on investment advisers and broker-dealers
For U.S.-regulated advisers and broker-dealers, these regulatory changes aren’t abstract policy; they’re practical shifts in how firms can access, hold and report on digital assets. The most immediate impacts include:
- Access: Regulated pathways into crypto are expanding
- Choice: Bank custody, broker-dealer custody or regulated self-custody are now options
- Liquidity: Lending against crypto holdings is moving into the mainstream
- Operational impact: There will be new obligations around reserves, audits and disclosures
- Jurisdictional clarity: A clearer SEC/CFTC jurisdictional divide will reduce uncertainty but may add dual-registration obligations
How we can help
The state of crypto regulation in the U.S. is changing quickly as frameworks begin to mirror traditional finance. But digital assets bring their own complexities: new asset classifications, evolving custody rules, heightened vendor risk and novel AML/KYC requirements.
Firms that act early to strengthen governance and compliance will be better positioned as tokenization, decentralized finance (DeFi) and stablecoin adoption accelerate. Our U.S. regulatory consulting team helps managers assess registration requirements, update custody and disclosure frameworks and assess operational impacts.
Contact our team today to learn how we can help you stay compliant as requirements evolve.
