SEC crypto custody plan leads October 3 regulation news

The SEC pushed a crypto custody framework while banks sued the OCC and leveraged ETPs won approval.

CoinDesk AI Desk

5 Oct 2026, 01:10 UTC · 4 min read

✓ 1 SOURCE CHECKED

SEC crypto custody plan leads October 3 regulation news — Image: The Crypto Basic

Key takeaways

Custody stays central. The SEC's crypto custody proposal was the main policy story of October 3.
Bank group sues. The ICBA filed suit against the OCC in Washington, D.C., on October 2.
3x products cleared. The SEC approved 3x leveraged Bitcoin, Ether and other ETPs for listing.

What happened

The SEC's crypto custody proposal was the day's main policy story. Chair Paul Atkins said the rules would give investment advisers and funds a compliant way to hold crypto, and that onchain markets should not be pushed offshore or fitted into ill-suited models. Bitwise counsel said the framework covers custody concerns but leaves decentralized vaults in an unsettled zone.

The Independent Community Bankers of America is suing the OCC over national trust bank charters for crypto firms, saying the charters let crypto companies skip safeguards applied to traditional banks. The group filed in federal court in Washington, D.C., on October 2, challenging the OCC's March 2026 National Bank Chartering rule, Interpretive Letter 1176 and Protego's charter approval, and arguing the agency exceeded its statutory authority.

Treasury announced coordinated action on October 1 against the A7 Network, which it describes as a sanctions-evasion network connected to Russia and used by Iran. OFAC designated the network as a significant transnational criminal organization. FinCEN proposed restrictions on funds transfers involving its sub-agents and issued an alert to financial institutions, and Treasury identifies the ruble-backed A7A5 token as part of the network's infrastructure.

Why it matters

The enforcement threads carry different legal weight. The OFAC designation brings blocking consequences under applicable sanctions rules, while FinCEN's transfer prohibition remains a proposal and should not be described as an effective final rule. The ICBA complaint is a set of allegations and requested remedies, and filing it does not by itself invalidate the chartering framework.

For custodians weighing a national trust charter, the practical issue is planning uncertainty. Charter-dependent financing, product launches and commercial agreements should account for possible litigation over that route, and businesses should distinguish a conditional approval from permission to start specific activities.

What the data shows

NEAR Intents says all $3.8 million taken in its exploit has come back, and the investigation is closed.
Alex Shevchenko said 34.59 BTC, worth about $2.95 million at the time, went back to a published Bitcoin address, with roughly $850,000 returned another way.
El Salvador received about $138, $139 million after the IMF signed off on a waiver, even though the country missed its Bitcoin target.
A Philippine court froze 25 crypto wallets and 86 bank accounts tied to an unnamed lawmaker in a flood-control plunder probe, covering 116 assets in total.

Background

The SEC approved 3x leveraged Bitcoin, Ether and other ETPs for listing, according to Bloomberg ETF analyst Eric Balchunas. The Volatility Shares line covers Bitcoin, Ether, gold, silver, crude oil and natural gas.
Featherlend launched Brazilian-real lending on Polygon, using Morpho isolated markets, the BRZ stablecoin and Chainlink price data.
Valour launched a Pi-linked ETP in Europe that trades on Sweden's Spotlight Stock Market, with a stated fee of 1.9%.
Japan launched a tax system to detect undeclared crypto, the Philippine central bank restricted Coins.ph, and South Korea plans to widen tokenization to stocks, bonds and funds.
CZ restated why he recommended pausing withdrawals after the Bybit hack, in a recap of a September 25 interview. Bybit did not pause and no further loss followed, and he called it a risk-assessment call, not a settled rule.

Questions readers ask

What did the SEC propose for crypto custody?

Chair Paul Atkins said the proposed rules would offer investment advisers and funds a compliant way to hold crypto, and that onchain markets should not be pushed offshore. Bitwise counsel said the framework still leaves decentralized vaults in an unsettled zone.

Why is the ICBA suing the OCC?

The group argues that national trust bank charters let crypto firms skip safeguards applied to traditional banks, and that the OCC went beyond its statutory authority. It filed in federal court in Washington, D.C., on October 2 and asks the court to set the challenged actions aside and block further charter approvals under the rule and interpretation.

What is the A7 Network and the A7A5 token?

Treasury describes the A7 Network as a sanctions-evasion network connected to Russia and used by Iran. OFAC designated it as a significant transnational criminal organization, and Treasury identifies the ruble-backed A7A5 token as part of the network's infrastructure.

Is the FinCEN transfer restriction already in force?

No. FinCEN proposed restrictions on funds transfers involving the network's sub-agents. That transfer prohibition remains a proposal and should not be described as an already effective final rule.