SEC Proposes Overhaul of Crypto Custody Rules for Investment Advisers

The SEC proposed a tailored crypto custody framework for investment advisers and funds, while Robinhood launched its Arbitrum-based Layer 2 mainnet and regulators warned of stablecoin risks.

1. SEC Proposes Overhaul of Crypto Custody Rules for Investment Advisers and Funds: The SEC proposed rules under the 1940 Acts to establish a tailored crypto custody framework, permitting the use of state trust companies and conditional self-custody for digital assets.
2. Robinhood Launches Public Mainnet for Arbitrum-Based Layer 2: Robinhood launched its Robinhood Chain mainnet featuring stock tokens for international users, USDG lending via Morpho for US clients, and derivatives for EU customers.
3. ECB and BIS Warn Stablecoins Challenge Monetary Control and Banking Stability: The ECB and BIS warned that stablecoins, with a market capitalization approaching $300 billion, could trigger bank runs, disintermediate deposits, and evade capital controls.
4. SEC Grants Conditional Relief for Onchain Tokenized Stock Trading: The SEC approved temporary Exchange Act exemptions under the Innovation Exemption to permit the trading of tokenized NMS stocks on permissioned venues.
5. Armada II Shareholders Approve Evernorth Merger to Launch XRP Treasury on Nasdaq: Armada II shareholders approved a business combination with Evernorth Holdings, establishing a public firm holding 473 million XRP to trade under ticker XRPN on Oct. 8.
6. Ethereum Foundation and Open Anonymity Project Deploy zkAPI on Mainnet: The Ethereum Foundation and Open Anonymity Project launched zkAPI on the Ethereum mainnet on Oct. 1, using zero-knowledge proofs to shield payment identities for AI queries.
7. Kiln Postmortem Details Lido Validator Exit After Compromise Cost 207 ETH: A compromised GitHub token on Sept. 8, 2025, led Kiln to exit 5,726 Lido validators to rotate credentials, resulting in 207.312 ETH in missed rewards.

Numbers

Bitcoin traded at $84,614, up 1.2% over the last 24 hours, while Ether rose 0.6% to $2,698, bringing the total crypto market capitalization to $2.89 trillion.

Watch

• The publication of the SEC's custody proposing release in the Federal Register, which will initiate a 60-day public comment period.
• The closing of the Evernorth transaction on Oct. 7 and the initial public trading debut of XRPN on Nasdaq on Oct. 8.
• The Lido analytics workgroup's forthcoming detailed compensation or impact report in the governance forum.