How 3 regulatory shifts will change how RIAs recommend crypto

“Should my portfolio include crypto?” 

Processing Content

Registered investment advisors have fielded this question from clients for years. But until recently, the benefits of including digital assets in a client’s portfolio were outweighed by the regulatory risk. Since the U.S. had no clear rules of the road for digital assets, most RIAs simply weren’t in a position to take on the associated compliance risk.

After years of uncertainty and increasing frustration, the regulatory tides turned in 2025. In July, President Donald Trump signed the Guiding and Establishing National Innovation for U.S. Stablecoins, or GENIUS Act, into law. It provides a comprehensive federal framework for regulating stablecoins, paving the way for them to be further integrated into the financial system.

Combine that with regulatory clarity from the SEC on custody this summer and legislation currently pending in Congress, and it adds up to a new regulatory architecture that allows advisors to offer crypto investment to clients with increased confidence — albeit with increased fiduciary responsibilities.

READ MORE: Most advisors admit they don’t fully understand — or manage — crypto

SEC guidance expands client options, RIA diligence standards

On Sept. 30, the SEC announced in a no-action letter that certain state-chartered trust companies can now act as custodians for digital assets under federal law. 

The new guidance may not have garnered many headlines, but it has real significance for RIAs.  Put simply, it gives investment advisors more crypto custody options, including federally regulated banks and broker-dealers. This is a net positive for RIAs in searching for custodians with the lowest fees and best reputation. 

But expanded options mean potentially expanded fiduciary diligence. RIAs must evaluate all custodian’s internal controls, segregation practices and even cybersecurity protocols. Additionally, the custodian needs to provide proof of audited financials, control reports and ensure custodial covenants protect clients. 

The Clarity Act: A road map for RIAs

The Digital Asset Market Clarity Act (or simply the Clarity Act) is currently stalled in the Senate, in part due to delays caused by the government shutdown. If passed, it will offer a broad regulatory framework for the digital assets industry and divide up regulatory responsibilities between the SEC and the Commodity Futures Trading Commission. 

The act would also provide further criteria on whether certain digital assets are defined as securities, bringing much-needed guidance for RIAs struggling with how to treat crypto tokens. 

Under the current draft, the issuer would be able to self-certify certain ancillary assets, and then the SEC would have an additional 60 days to reject or certify whether a token or cryptocurrency is not a security. By directing the SEC to tailor existing requirements to consider the unique technological characteristics of digital assets, the law would allow RIAs to manage risk by providing clarity on custody, valuation standards and regulatory jurisdiction.

Fit the bitcoin strategy to the client

Taken together, these changes give advisors access to a wider range of crypto assets and, as a result, a broader range of investments to offer clients. Options could include investing in established cryptocurrencies that don’t yet have a spot ETF or employing stablecoin yield strategies, which have become an increasingly popular alternative to parking cash in money-market savings accounts. 

READ MORE: Betting on bitcoin is the smart move for financial advisors

The goal is for clients to feel comfortable. For some, that means investing in bitcoin as a real estate replacement strategy. For others, it’s a way to hedge against inflation. Since there can only be 21 million bitcoin in circulation, a growing number of investors now believe bitcoin is essentially gold 2.0 due to its limited supply. Many in the industry, myself included, believe it’s only a matter of time before bitcoin overtakes gold’s roughly $2 trillion market cap.  

Ultimately, it’s the investment advisor’s responsibility to find a thesis that makes sense for each client and thoughtfully model it into their long-term portfolio. This new regulatory environment provides more opportunities than ever to do just that.