White House Reviews New SEC Crypto Rules After Midterms

White House Begins Review of SEC Crypto Broker-Dealer Rules

The U.S. Securities and Exchange Commission (SEC) has taken a major step toward shaping how traditional brokerage firms handle digital assets. On November 3, 2026, the SEC submitted a proposed rule to the White House for regulatory review.

The proposal is officially identified as RIN 3235-AN48. It is currently under review by the Office of Information and Regulatory Affairs (OIRA). No public release date has been set yet.

At the time of the submission, market prices showed Bitcoin trading around $75,883 (+0.63%) and EthereumETH+0.95% around $2,244 (+0.88%). However, past performance of digital assets is no guarantee of future results, and crypto markets remain inherently volatile.

This regulatory initiative comes under SEC Chair Paul Atkins. His administration aims to create clearer, binding standards for digital asset businesses operating in the United States.

Understanding the Four Target Securities Regulations

The SEC proposal specifically targets four core regulations under the Securities Exchange Act of 1934. These rules govern how broker-dealers manage customer money, protect assets, and keep financial records.

• Rule 15c3-1 (Net Capital Rule): Requires broker-dealers to hold enough liquid assets to meet their financial obligations.
• Rule 15c3-3 (Customer Protection Rule): Sets strict requirements for protecting customer securities and keeping them in reserve accounts.
• Rule 17a-3 (Recordkeeping Standard): Outlines specific daily financial records broker-dealers must create.
• Rule 17a-4 (Record Preservation Standard): Dictates how long and in what format financial records must be stored.

Applying these traditional finance (TradFi) rules to digital assets creates unique technical challenges. Regulators and firms must figure out how private keys, blockchain ledgers, and transaction histories fit into existing laws.

For brokerage firms, these details matter immensely. Net capital rules control how much business a firm can legally execute. Custody obligations determine how customer crypto tokens must be physically and digitally secured.

Because the draft text remains secret, industry experts do not know if the proposed rules will simplify compliance, add tougher restrictions, or do a mix of both.

Building on the SEC's December 2025 Crypto Custody Guidance

This new formal rulemaking builds on informal guidance issued by the SEC Division of Trading and Markets in December 2025.

That earlier guidance allowed broker-dealers to meet customer protection rules while holding crypto directly on distributed networks. However, firms had to meet strict security conditions.

• Protecting and managing cryptographic private keys securely.
• Maintaining documented custody procedures for routine operations.
• Preparing contingency plans for network outages or technical disruptions.
• Managing risks from blockchain hard forks and network protocol changes.

The 2025 guidance also introduced capital haircut rules for holding cryptocurrencies. In financial terms, a haircut reduces the recognized value of an asset on a firm's balance sheet to account for market risk.

Under that framework, proprietary holdings of Bitcoin (BTCBTC+0.36%) and Ether (ETH) received a 20% haircut. Qualified payment stablecoins received a lower 2% haircut. Larger haircuts force firms to keep extra capital on hand to back their positions.

Unlike staff statements, formal rulemaking creates legally binding regulations. Formal rules require public notice, comment periods, and full commission voting before becoming enforceable standards.

Political Shift: Navigating a Democrat-Controlled Congress

The timing of this proposal coincides with a major shift in Washington politics. Democrats secured majorities in both the House and Senate during the November 3, 2026 midterm elections.

Republicans maintain control of the 119th Congress until January. However, when the 120th Congress takes office on January 3, 2027, Democratic lawmakers will take over leadership of key committees.

The SEC derives its rulemaking authority from Sections 15(c) and 17(a) of the Securities Exchange Act of 1934. Democratic control gives lawmakers greater oversight authority over federal regulators.

Congress could hold oversight hearings, request non-public documents, or attempt to use the Congressional Review Act to challenge new regulations. However, overturning a completed SEC rule presents significant political hurdles.

President Donald Trump retains presidential veto power, which requires a two-thirds majority vote in both chambers to override. This makes stopping an adopted rule difficult for Congress.

Democrats wanted every retail crypto trade routed through a registered broker or dealer so everyday investors always have a regulated middleman. The Clarity Act requires it. Democrats voted against putting a regulated professional between Main Street and the market.

Senator Cynthia Lummis (R-WY) shared this insight on social media on November 5, 2026, as she continued pushing for her market structure legislation known as the Clarity Act.

What Lies Ahead for Crypto Businesses and Investors

For financial institutions and crypto firms, the White House review starts an important countdown. Clearer rules could help traditional institutions expand digital asset services with greater confidence.

However, regulatory clarity does not automatically mean lighter supervision. Companies may face higher technology expenses, stricter compliance obligations, and operational safeguards to protect customer assets.

In related news highlighting regulatory enforcement, a former FBI agent recently pleaded guilty to stealing nearly $2.5 million in cryptocurrency across 35 law enforcement cases by misusing confidential credentials.

Investors should remember that digital asset markets remain volatile and involve technical and regulatory risks. While clearer rules help structure the market, legal certainty takes time to establish across changing political administrations.