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On Tuesday, the SEC approved state trust companies to act as custodians for crypto assets under the Investment Company Act and the Investment Advisers Act.<\/p>\n
State entities that are not federally chartered banks, which were generally not allowed to accept deposits, may now be responsible for the safety of investors\u2019 crypto assets.<\/p>\n
The no-action letter addresses<\/a> uncertainty about whether state trust companies qualify as \u201cbanks\u201d under the Acts for purposes of holding crypto assets and related cash.<\/p>\n The SEC will not recommend enforcement action against registered investment advisers or regulated funds that treat state trust companies as qualified custodians for crypto assets, subject to meeting specific conditions.\u00a0The conditions include annual due diligence, custody agreements, risk disclosures, and best interest determinations.<\/p>\n \u201cThis additional clarity was needed because state-chartered trust companies were not universally seen as eligible custodians for crypto assets,\u201d Brian Daly, Director of the SEC\u2019s Division of Investment Management, told<\/a> Crypto In America host Eleanor Terrett.<\/p>\n \u201cThis is a staff letter, so at some point, this topic could be addressed by future rulemaking. We believe the market will benefit from having this guidance for today\u2019s products, today\u2019s managers, and today\u2019s issues.\u201d<\/p>\n<\/blockquote>\n Terrett explained that this \u201copens the door for more players in the crypto custody market as well as broader access for funds to custody crypto.\u201d Players such as Coinbase and Ripple with custody through Standard Custody, BitGo, or Wisdom Tree, and others, \u201cwill be recognized as qualified custodians.\u201d<\/p>\n Under the new @SECGov<\/a> no-action letter, investment advisors can use Trust companies like Gemini as qualified custodians for crypto assets.<\/p>\n Amazing awaits! <\/p>\n \u2014 GeminiTrustCo (@GeminiTrustCo) September 30, 2025<\/a><\/p>\n<\/blockquote>\n SEC Chair Paul Atkins unveiled \u201cProject Crypto\u201d in July to dramatically lower regulatory burdens for the US crypto industry and to accelerate innovation and the integration<\/a> of digital assets within the economy.<\/p>\n SEC Commissioner Caroline Crenshaw strongly criticized<\/a> the staff letter on state trust company crypto custody.<\/p>\n She claimed that the relief weakens investor protections by allowing state trust companies, which don\u2019t meet traditional custody standards, to hold crypto assets, creating a dangerous precedent without proper justification or process.<\/p>\n \u201cThe statutes and rules regarding custody are what stand between American investors, on the one hand, and the risk of theft, loss, or misappropriation of their assets, on the other.\u201d<\/p>\n<\/blockquote>\n Crenshaw, who has been vehemently<\/a> anti-crypto in the past, argued that the relief lowers standards, creates unfair competition, crypto exceptionalism, and improper process.<\/p>\n \u201cWith limited factual support or legal analysis, this action bores a troubling hole in that regime \u2013 and I fear investors\u2019 assets may fall through the cracks,\u201d she concluded.<\/p>\n<\/blockquote>\n The post SEC Plans to Open Doors For More Crypto Custody Players in the US<\/a> appeared first on CryptoPotato<\/a>.<\/p>\nGreenlight For Crypto Companies<\/h2>\n
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The Pushback Begins<\/h2>\n
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