Industry Watch
What we’re watching.
The public materials we monitor as digital-asset custody, control, tax, and market-structure guidance evolves.
We track public regulator materials, legislative activity, industry letters, no-action letters, proposals, court decisions, tax guidance, and market-structure developments that may affect how SEC-registered advisers work with traditional and digital assets.
This page is a watchlist — not legal advice, and not a statement that any proposal or industry submission is law.
What this page is. A source register. Each item links to the official or primary source and is labeled by source type and status so the difference between a final rule, a proposal, a staff statement, a no-action letter, and an industry submission is visible at a glance.
What this page is not. Legal, tax, or compliance advice; a representation that any item applies to a specific client; or a statement that a proposal, staff statement, no-action letter, or industry submission is binding law. Industry submissions are third-party input, not regulator guidance. The notes reflect Protocol Wealth’s conservative reading at the date shown, and the area is evolving.
How to read the labels
Final — Binding final regulatory action, subject to its effective date and scope.
Proposed — A pending proposal. Not final law.
Withdrawn — A proposal that was withdrawn or is no longer active.
Staff-level — A staff statement — not a Commission rule unless stated otherwise.
Fact-specific — Relief or guidance limited to specific facts; not a broad rule.
Industry input — A third-party submission. Not regulator guidance and not law.
Monitoring — A development we are tracking; not itself a rule or obligation.
Superseded — Replaced or overtaken by a later development.
Guidance — Official agency guidance — an FAQ, notice, or form instructions. It explains how the agency applies existing law; it is not itself a rule.
Enacted — A statute signed into law. Its requirements apply from its stated effective date, which may be later.
Custody & Safeguarding
SEC Safeguarding Advisory Client Assets proposal — withdrawn
The SEC withdrew the proposed Safeguarding Advisory Client Assets rulemaking in 2025. The current anchor remains the Advisers Act Custody Rule, Rule 206(4)-2, unless new rulemaking occurs. By its terms, Rule 206(4)-2 applies to client "funds or securities". SEC Interpretive Release 33-11412 (effective March 23, 2026) addresses which crypto assets are securities; it does not address Rule 206(4)-2, including how that rule applies to crypto assets that are not securities. On October 1, 2026 the SEC proposed new custody rules under RIN 3235-AN46 (see the separate entry); that proposal is not final.
How we read it. The existing Custody Rule, Rule 206(4)-2, remains the rule in force. The October 1, 2026 proposal is pending and not final, and we take no public position on how current rules apply to any specific digital asset.
SEC proposal: Adviser and Regulated Fund Custody Rules; Crypto Custody Rules
Release Nos. IA-7023 and IC-36353 (File No. S7-2026-35) propose rules for how investment advisers and regulated funds may custody crypto assets that are funds or securities. They would treat an adviser's possession of any portion of a client crypto asset's key materials as self-custody, and set conditions for it. They would also recognize state trust companies, subject to conditions, as qualified custodians for advisers' client crypto assets. Comments are due December 7, 2026. This is a proposal and is not final.
How we read it. If adopted as proposed, it would bear on wallet arrangements in which an adviser holds part of the key materials, including multi-party computation (MPC) wallets. We are reviewing the proposal. Until any rule is final, Rule 206(4)-2 remains the rule in force.
Self-Custody & Interfaces
SEC staff statement on Covered User Interface Providers
A staff statement addressing Exchange Act Section 15 broker-dealer registration for interfaces that help users transact on blockchain protocols through their own self-custodial wallets.
How we read it. Useful for non-custodial interface framing. It is staff-level, limited to broker-dealer registration under the Exchange Act — it is not custody guidance and not tax guidance.
CFTC staff no-action letter 26-09 (Phantom)
Fact-specific CFTC staff no-action relief from introducing-broker and associated-person registration for self-custodial wallet software facilitating trading with registered derivatives market infrastructure.
How we read it. A monitoring item for self-custodial wallet / front-end interface developments. It is fact-specific relief — not a blanket approval for DeFi or for RIA self-custody structures, and it does not apply directly to Protocol Wealth.
Cross-Agency & Harmonization
SEC–CFTC harmonization memorandum of understanding
An agency memorandum of understanding / harmonization initiative between the SEC and CFTC.
How we read it. A possible path toward coordinated digital-asset treatment over time. It is not a custody rule or a tax rule; we track it as a backdrop development.
SEC–CFTC harmonization initiative — written input log
A public log of written submissions to the harmonization initiative, including industry letters. Any AI-generated key points on the log are not staff-reviewed.
How we read it. Submissions on the log — including Veda and Wave — are tracked as industry input, not as official guidance. We read the submissions themselves rather than relying on auto-generated summaries.
SEC Interpretive Release 33-11412 / 34-105020 — application of federal securities laws to crypto assets
A Commission interpretation issued March 17, 2026 and effective March 23, 2026 (91 FR 13714) on how the federal securities laws apply to certain crypto assets and transactions. It sets out a five-part taxonomy (digital commodities, digital collectibles, digital tools, stablecoins, digital securities), explains when a crypto asset is subject to — and separates from — an investment contract, and addresses protocol mining, protocol staking, staking receipt tokens, wrapping, and airdrops. The CFTC joined with guidance that it will administer the Commodity Exchange Act consistently with the interpretation.
How we read it. Relevant securities-law backdrop for how certain digital assets and operations are characterized. It is a securities-law interpretation, not a custody rule or a tax ruling.
SEC Division of Corporation Finance FAQs on the crypto asset interpretation
Staff FAQs on the Commission's March 17, 2026 Interpretive Release: how staking receipt tokens are classified, what distinguishes a "receipt", when promotional statements are promises of essential managerial efforts, and when a crypto asset separates from an investment contract. Originally issued September 25, 2026; updated September 28, 2026. The staff states the FAQs have no legal force or effect.
How we read it. Useful staff context for how receipt-style tokens, such as staking receipts and redeemable wrapped tokens, are characterized under the securities laws. It is staff-level and securities-law only; it does not address investment adviser custody and is not tax guidance.
Veda Tech Labs / Morrison Cohen vault submission to the SEC and CFTC
A private written submission proposing that non-custodial smart-contract vault architectures can satisfy qualified-custody and segregation requirements when specific structural guardrails are met.
How we read it. A useful guardrail framework for vault custody and segregation analysis. It is an industry submission — not law, not a rule, and not regulator approval.
Wave Digital Assets letter supporting the Veda submission
A private written submission from an SEC-registered adviser supporting the SMA-vault framing in the Veda submission.
How we read it. Supports the separately-managed-account vault framing from an adviser perspective. It is an industry submission — not law and not regulator guidance.
Tax
IRS digital asset broker reporting & Notice 2024-57
Final regulations and related IRS guidance on broker reporting for digital asset sales and exchanges. Notice 2024-57 provides broker reporting relief for certain categories pending further guidance.
How we read it. Notice 2024-57 is a reporting-relief source, not a definitive substantive tax ruling. It does not determine that wrapping, liquidity-pool activity, staking, lending, short sales, or notional principal contracts are non-taxable.
IRS Instructions for Form 8275 (Disclosure Statement)
Official IRS instructions for Form 8275. Adequate disclosure may help avoid certain accuracy-related penalties when a position has reasonable basis and other requirements are met.
How we read it. We frame Form 8275 conservatively: adequate disclosure may help support a reasonable-basis position and may help reduce the risk of certain penalties if requirements are met. It is not automatic penalty elimination and does not replace tax counsel.
AML & Sanctions
FinCEN investment adviser AML rule — effective date postponed
FinCEN issued a final rule postponing the effective date of the investment adviser AML rule to January 1, 2028.
How we read it. A monitoring item for AML and suspicious-activity obligations. We maintain AML, OFAC, and suspicious-activity procedures; we do not overstate the current obligation while the effective date is delayed.
OFAC digital asset sanctions FAQs
Official OFAC FAQs and guidance on digital asset sanctions, including blocked-property and screening expectations.
How we read it. Relevant to sanctions screening, wallet monitoring, and blocked-property controls. We track OFAC guidance updates as part of our compliance program.
Market Structure
SEC proposal to rescind Regulation NMS Rules 611 and 610(e)
A proposed rule to rescind Regulation NMS Rules 611 and 610(e) (Release 34-105655; comments closed August 17, 2026). Proposed, not final.
How we read it. Market-structure backdrop relevant to broader investment implementation. It is a proposed rule, likely not directly custody-relevant; we track it as market structure, not as a custody change.
SEC proposed Regulation Crypto Assets (Release 33-11434)
A proposed offering regime for certain investment contracts involving crypto assets (Release Nos. 33-11434, 34-106150; 91 FR 54510, August 21, 2026): two Securities Act registration exemptions and a conditional safe harbor from the term "investment contract." Comments are due October 20, 2026. Proposed, not final.
How we read it. Securities-law backdrop for how token offerings may be structured and when a crypto asset is treated as not subject to an investment contract. It is a proposal addressed to issuers — not a custody rule, not a tax ruling, and not law while proposed.
GENIUS Act — federal payment stablecoin framework (Public Law 119-27)
The GENIUS Act (S. 1582), signed July 18, 2025, creates a federal framework for payment stablecoins and their issuers. Under section 20 it takes effect on the earlier of 18 months after enactment (January 18, 2027) or 120 days after the primary federal payment stablecoin regulators issue final implementing regulations. As of September 29, 2026 it is not yet effective, and its implementing regulations remain proposals.
How we read it. Relevant to how payment stablecoins may be characterized once the Act is effective: the SEC has noted that payment stablecoins from a permitted issuer will not be securities by operation of the statute after that date (Release 33-11412, fn. 80). We do not treat its requirements as in force before then. It is not an investment adviser custody rule and not a tax ruling.
Vendor & Infrastructure
Paxos acquisition of Fordefi
Paxos acquired Fordefi, combining Paxos's regulated infrastructure with Fordefi's MPC wallet architecture, policy engine, and DeFi integrations.
How we read it. A strategic and diligence item. It does not, on its own, make Fordefi a qualified custodian for Protocol Wealth client assets and does not automatically satisfy the Custody Rule. Any change in characterization is subject to agreement, entity, account structure, and counsel review.
Anchorage Digital acquisition of the Securitize for Advisors platform
Anchorage Digital announced an acquisition of the Securitize for Advisors platform to strengthen its wealth-management and RIA capabilities.
How we read it. Relevant to the evolution of Anchorage's wealth/advisor platform and the qualified-custody page. Platform tools are not the same thing as Protocol Wealth taking custody.
BitGo qualified custody materials
BitGo's published materials describing its qualified digital asset custody offering.
How we read it. A qualified digital asset custody option where appropriate. We do not overstate scope, insurance, or status beyond what current agreements and due diligence confirm.
Read next
Related pages
Custody and Control
How assets are held, who controls them, and what the firm can and cannot do.
Qualified Custody
Independent qualified digital asset custody options, where appropriate — and how custody is kept separate from execution.
Self-Custody & Client-Controlled Wallets
Fordefi and Turnkey wallet infrastructure, client recovery, and the limits on the firm's role.
Bailment Framework
The deeper, source-tracked technical and tax-analysis reference — education, not advice.
Change log
Versions
Initial publication of the source register with source-status labels across custody, self-custody and interfaces, cross-agency harmonization, tax, AML and sanctions, market structure, and vendor developments.
Last updated: October 15, 2026. Protocol Wealth, LLC is an SEC-registered investment adviser (CRD #335298). See ourForm ADVfor authoritative regulatory disclosures. Registration does not imply a particular level of skill or training; advisory services are provided only under a signed advisory agreement.
This page is general information and a monitoring list. It is not legal, tax, accounting, or compliance advice; not a representation that any listed item applies to a specific person; and not a statement that any proposal, staff statement, no-action letter, or industry submission is binding law. Industry submissions are third-party input, not regulator guidance. Links to third-party and government sources are provided for reference; Protocol Wealth is not responsible for their content. The notes reflect a conservative reading as of the dates shown and may change.
All investments involve risk, including the potential loss of principal. Digital assets are highly speculative and volatile. Past performance does not guarantee future results.