Overview

• An SEC Division of Investment Management no-action letter says staff will not recommend enforcement if registered advisers or funds treat state‑chartered trust companies as banks for crypto custody.
• The guidance creates a path for state trust affiliates of firms such as Coinbase, Kraken, and Ripple to serve as qualified custodians for digital assets.
• Advisers must review audited GAAP financials and independent control reports, ensure client assets are segregated, and prohibit lending or rehypothecation without client consent.
• The letter emphasizes that advisers remain responsible for determining a trust’s authorization to provide crypto custody and for assessing safeguards such as private key management.
• Commissioner Caroline Crenshaw objected on procedural grounds, while supporters praised the clarity, and Chair Paul Atkins has indicated formal custody rules are coming.