SEC CUSTODY PROPOSAL: CUSTODIAN COST IS NO REASON FOR AN ADVISER TO SELF-CUSTODY — THE TEST IS WHETHER ANY QUALIFIED CUSTODIAN “WILL MAINTAIN” THE COIN — QUESTION 38 ASKS IF THAT SHOULD CHANGE — COMMENTS DUE DECEMBER 5

The SEC's crypto custody proposal prints in the Federal Register on October 6, 2026. Comments are due 60 days later, on December 5, 2026. The full release runs 682 pages. When the SEC proposed it on October 1, we said the fight would be over one word: available. The release now says what that word means.

An adviser can hold client crypto itself only after it forms "a reasonable basis, upon due inquiry, for believing that no qualified custodian will maintain a crypto asset." It has to decide coin by coin, with no blanket call, and check again every quarter. Price does not count. In the SEC's words: "The proposed adviser self-custody rule would not permit the adviser to make the QC determination based on the costs associated with engaging a qualified custodian."

For bitcoin, that settles it. Banks and trust companies already hold bitcoin, so an adviser cannot say no custodian will. Under this text, an adviser managing client bitcoin hands the keys to someone else, whatever that costs the client. The self-custody door is for coins where custodians "have not developed the infrastructure to support custody of a particular crypto asset." That is the release's own example.

One question is still open. Question 38 asks whether an adviser should be allowed to self-custody "even where a qualified custodian is available," and whether a custodian's cost, service quality and technology could count. That is where a comment letter can move this rule. None of it touches a person holding their own keys. At the time of this writing, bitcoin was $85,519.