Fintech · Industry brief

On October 1, 2026, the SEC proposed comprehensive amendments to investment adviser and regulated fund custody rules, including new frameworks for crypto asset custody. The proposal redesignates current rule 206(4)-2 as rule 223-1 and establishes conditions for adviser self-custody of crypto assets when no qualified custodian is available, codifies requirements for state trust company custodians, and modernizes fund custody rules. For advisers self-custodying crypto assets, the proposal mandates detailed safeguarding requirements including key management, joint authorization for transfers, address segregation, cybersecurity controls, and annual internal control reports from independent accountants. The proposal also introduces significant amendments to general custody rule provisions affecting all advisers, including new exceptions for discretionary trading authority, standing letters of authorization, and inadvertent custody; elimination of PCAOB registration requirements for auditors; extended deadlines for audit provision compliance; and restructured Form ADV Item 9 disclosures. The SEC Release Nos. IA-7023; IC-36353; File No. S7-2026-35 requests comments within 60 days of Federal Register publication.

Evernorth Holdings, a digital asset treasury company, completed its business combination with Armada Acquisition Corp. II, a SPAC sponsored by Arrington XRP Capital Fund. The company will begin trading on Nasdaq under ticker XRPN on October 12, 2026, holding approximately 473 million XRP and $300 million in gross cash proceeds. Evernorth raised capital from institutional investors including Arrington Capital, SBI Group, Ripple, Pantera Capital, Kraken, and GSR, and plans to deploy capital across the XRP ecosystem to support infrastructure and use cases while operating under Nasdaq reporting and governance standards.

The FTC has settled enforcement actions against two payment processors for facilitating fraud. Nuvei agreed to pay $4.85 million after processing over $30 million in payments for the Reimage tech support scam and other deceptive merchants from 2017 to 2023; the settlement bars Nuvei from processing payments for tech support products sold via telemarketing or pop-ups and requires enhanced merchant screening. Humboldt Merchant Services will pay $12 million and face a permanent ban on processing payments for high-risk merchants after processing payments for over 1,000 shell company merchants engaged in unauthorized billing scams, including Legion Media; Humboldt is also prohibited from credit card laundering tactics and processing for merchants on fraud watchlists. Both settlements, approved by federal district courts, include consumer redress provisions and restrictions on load balancing and other fraud evasion techniques.

The Hong Kong Securities and Futures Commission (SFC) reprimanded and fined Zheng Da International Financial Holding Limited HKD 7 million, and suspended responsible officer Zhong Hao for seven months, for failures in customer due diligence, client deposit monitoring, and transaction surveillance. The SFC found that Zheng Da permitted 160 clients to place over 10 million futures trades using customer-supplied systems without adequate due diligence procedures or records, failed to identify suspicious deposits inconsistent with clients' financial profiles (including two extreme cases involving HKD 28 million and HKD 37 million deposited by low-income clients), and did not detect 176 same-second buy/sell orders. The firm also breached Anti-Money Laundering and Counter Terrorist Financing Ordinance provisions related to money-laundering risk assessment, AML controls, and suspicious transaction reporting. The SFC cited as aggravating that Zheng Da had not enhanced controls despite multiple prior SFC enforcement actions for similar violations during the investigation period (2021-2023).