SEC allows investment advisers to use chartered trust companies as crypto custodians
The US SEC is allowing investment advisors to rely on chartered trust companies as crypto custodians.
This means that any officially approved or licensed trust company can hold cryptocurrencies like Bitcoin or Ether in the same way they hold hard cash or other assets.
The American financial watchdog disclosed the update in a letter sent to Simpson Thacher & Bartlett LLP, a law firm that reached out to the SEC, seeking clarification.
SEC supports state-trusts as crypto custodians
The Securities and Exchange Commission stated in the letter that trust companies may be treated as “banks.” The approach works under the Investment Advisers Act of 1940 and the Investment Company Act of 1940. State-chartered trust companies are now eligible to hold crypto assets on behalf of their clients.
The SEC shared the letter and analysis on its website. The agency wrote,
“…any Registered Adviser that has custody of client funds or securities maintain those funds and securities with a qualified custodian, where “qualified custodian” is defined to include “a bank as defined in Section 202(a)(2) of the Advisers Act.”
The SEC letter is classified as a no-action letter, meaning that the agency will not take enforcement action if advisers or funds use state trust companies to hold crypto assets.
Senator Cynthia Lummis posted on X and said that she is “encouraged to see @SECGov recognizing state-chartered trust companies as qualified digital asset custodians.” She reminded people of how Wyoming paved the way for this decision when it issued a no-action relief in 2020 and was criticized back then by SEC employees. She said, “They finally recognized the rigor & value of WY’s digital asset supervision.”
Brian Daly, Director of the SEC’s Division of Investment Management, told Eleanor Terrett that, “This additional clarity was needed because state-chartered trust companies were not universally seen as eligible custodians for crypto assets.”
Daly explained that the letter to Simpson Thacher & Bartlett is a staff letter. He said the topic could be brought up in future rulemaking, but for now, it works and provides clear guidance for today’s products and managers.
The decision taken by the SEC staff is a turning point, especially after the Federal Reserve and the Treasury Department restricted how banks and regulated entities could work with crypto firms in what is known as Operation Choke Point 2.0.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Webster, NY Receives $9.8M FastNY Grant and Plans Xerox Campus Transformation: A Prime Investment Prospect Focused on Real Estate and Infrastructure
- New York State allocated $9.8M via FAST NY to transform Webster's 300-acre Xerox campus into a $1B industrial hub. - Infrastructure upgrades (roads, utilities) aim to attract high-value manufacturing/logistics firms by creating "shovel-ready" conditions. - Strategic location near I-390 and Rochester Airport boosts appeal for e-commerce/cold-chain logistics, driving 10.1% local property value growth. - Project exemplifies infrastructure-driven economic revival, aligning public investment with private-sect

Opportunities for Industrial Property Development in Webster, NY
- Webster , NY's industrial real estate is transforming via $9.8M FAST NY grants and Xerox's brownfield redevelopment into a high-tech hub. - Infrastructure upgrades including roads, sewers, and grid modernization create shovel-ready zones attracting advanced manufacturing and logistics firms. - Xerox's land reclassification and BOA tax incentives accelerated site transformation, boosting residential values by 10.1% and slashing industrial vacancy to 2%. - Institutional investors and infrastructure-linked

Is Avalanche (AVAX) Poised for a Bullish Move? This Fractal Setup Suggest So!

Bitcoin News Update: Regulators Walk a Fine Line Between Crypto Expansion and Derivatives Hazards
- Bitcoin fell to $87,000 in late November 2025 amid bear market conditions, driven by Fed rate uncertainty and $248M+ derivatives liquidations. - Market focus centers on four factors: rate expectations, inflation, MSCI crypto index inclusion, and derivatives stress impacting leveraged positions. - Institutional demand showed mixed signals with $128.6M Bitcoin ETF inflows, while regulatory scrutiny intensified in South Africa and Abu Dhabi. - Key December data (jobs/PCE) and potential $90,000+ monthly clos

