SEC proposes crypto custody overhaul and grants tokenized stock relief

The SEC has proposed a modernized crypto custody framework for investment advisers while granting conditional regulatory relief for onchain tokenized stock trading, as global regulators target stablecoins and decentralized finance.

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 for advisers and funds, permitting the use of state trust companies and conditional self-custody. A 60-day public comment period begins upon Federal Register publication.
2. SEC Grants Conditional Relief for Onchain Tokenized Stock Trading: The regulator approved the Innovation Exemption to permit trading of tokenized NMS stocks under conditional Exchange Act relief. The temporary exemption bypasses stalled congressional legislation, allowing permissioned venues to pilot secondary markets.
3. ECB and BIS Warn Stablecoins Challenge Monetary Control and Banking Stability: With the stablecoin market cap approaching $300 billion, ECB official Isabel Schnabel warned of bank disintermediation and run risks. A BIS study across 130 economies also found stablecoin flows are actively evading capital controls.
4. Robinhood Launches Public Mainnet for Arbitrum-Based Layer 2: Robinhood launched its Arbitrum-based Layer 2, Robinhood Chain, featuring day-one deployments from Uniswap and Pleiades. The rollout includes stock tokens in over 120 countries and USDG lending via Morpho for US users.
5. Chainalysis Traces $387 Million Bitget Heist Linked to North Korea: North Korean-attributed attackers stole $387 million from exchange Bitget on Sept. 24 across 23 transactions on four chains. The breach pushed total cryptocurrency stolen by DPRK-linked entities in 2026 above $1 billion.
6. Ethereum Foundation and Open Anonymity Project Deploy zkAPI on Mainnet: Launched on Oct. 1, zkAPI uses Groth16 zero-knowledge proofs to let users pay for metered AI queries and RPCs from an onchain vault. The system shields payment identities from billing accounts, decoupling balances from application usage.
7. Ethereum Researchers Propose EIP-8363 Issuance Burn for Hegotá Hard Fork: A new proposal for the Hegotá upgrade aims to burn validator rewards when staking levels climb, phasing in over 18 months. The mechanism eliminates the issuance incentive to stake past 50% of circulating ETH to prevent centralization.

Numbers

Bitcoin rose 2.8% to $86,289, leading a 1.4% climb in total market capitalization to $2.92 trillion, while Ethereum gained 1.6% to trade at $2,743.

Watch

• The publication of the SEC's crypto custody proposing release in the Federal Register to start the 60-day public comment period.
• Client developer calls reviewing the Hegotá scope to decide if EIP-8363 advances to 'Considered' or 'Scheduled' status.
• Chainalysis's scheduled showcase of its investigative platform capabilities on Nov. 19, 2026.