{"id":406728,"date":"2025-10-01T07:45:17","date_gmt":"2025-10-01T02:15:17","guid":{"rendered":"https:\/\/dripp.zone\/news\/sec-no-action-letter-creates-opening-for-more-firms-to-serve-as-crypto-custodians-crypto-news\/"},"modified":"2025-10-01T07:55:22","modified_gmt":"2025-10-01T02:25:22","slug":"sec-no-action-letter-creates-opening-for-more-firms-to-serve-as-crypto-custodians-crypto-news","status":"publish","type":"post","link":"https:\/\/dripp.zone\/news\/sec-no-action-letter-creates-opening-for-more-firms-to-serve-as-crypto-custodians-crypto-news\/","title":{"rendered":"SEC No-Action Letter Creates Opening for More Firms to Serve as Crypto Custodians &#8211; Crypto News"},"content":{"rendered":"<div style=\"position:relative;overflow:visible;font-size:1.2em;line-height:1.58\">\n<div class=\"pt-8 pb-10 border-t border-b border-decryptGridline \">\n<h4 class=\"sc-b2a202e4-4 bNRGqr gg-dark:text-white\" color=\"#333\">In brief<\/h4>\n<ul>\n<li class=\"font-meta-serif-pro font-normal text-lg md:text-xl md:leading-9 tracking-px text-body gg-dark:text-neutral-100\">The SEC will not take enforcement actions against advisors and other entities for using state-chartered as crypto custodians.<\/li>\n<li class=\"font-meta-serif-pro font-normal text-lg md:text-xl md:leading-9 tracking-px text-body gg-dark:text-neutral-100\">This letter could lead to a potential opening for a greater number of organizations to serve as custodians for digital assets.<\/li>\n<li class=\"font-meta-serif-pro font-normal text-lg md:text-xl md:leading-9 tracking-px text-body gg-dark:text-neutral-100\">In July, Chair Paul Adkins unveiled\u00a0\u201cProject Crypto, an SEC initiative to dramatically lower regulatory burdens.<\/li>\n<\/ul>\n<\/div>\n<p class=\"font-meta-serif-pro scene:font-noto-sans scene:text-base scene:md:text-lg font-normal text-lg md:text-xl md:leading-9 tracking-px text-body gg-dark:text-neutral-100\">The U.S. Securities and Exchange Commission said in a <a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/www.sec.gov\/rules-regulations\/no-action-interpretive-exemptive-letters\/division-investment-management-staff-no-action-interpretive-letters\/simpsonthacherbartlett093025\" target=\"_blank\" class=\"sc-adb616fe-0 bJsyml\">letter<\/a> on Tuesday that it did not plan to take action against registered investment advisors, issuers of crypto funds, and other entities for using state-chartered trusts to hold digital assets.<\/p>\n<p class=\"font-meta-serif-pro scene:font-noto-sans scene:text-base scene:md:text-lg font-normal text-lg md:text-xl md:leading-9 tracking-px text-body gg-dark:text-neutral-100\">The updated guidance, a response from the SEC&#8217;s Division of Investment Management to a query filed by lawyers representing financial advisors, creates a potential opening for a greater number of organizations to serve as custodians for these assets, including affiliates of prominent crypto-focused firms such as Coinbase and Ripple.<\/p>\n<p class=\"font-meta-serif-pro scene:font-noto-sans scene:text-base scene:md:text-lg font-normal text-lg md:text-xl md:leading-9 tracking-px text-body gg-dark:text-neutral-100\">&#8220;Based upon&#8230;.your letter, the Division of Investment Management would not recommend enforcement action&#8230;.against a Registered Adviser or Regulated Fund for treating a State Trust Company as a &#8216;bank&#8217; related to placement and maintenance of Crypto Assets and Related Cash and\/or Cash Equivalents,&#8221; the SEC letter said, as long as certain criteria are met both by the advisor and the trust.<\/p>\n<p><iframe loading=\"lazy\" style=\"border:0\" src=\"https:\/\/myriad.markets\/embed\/market\/bitcoin-s-next-hit-moon-to-125k-or-dip-to-105k\" width=\"100%\" height=\"415px\"><span data-mce-type=\"bookmark\" style=\"display:inline-block;width:0px;overflow:hidden;line-height:0\" class=\"mce_SELRES_start\">\ufeff<\/span><\/iframe><\/p>\n<p class=\"font-meta-serif-pro scene:font-noto-sans scene:text-base scene:md:text-lg font-normal text-lg md:text-xl md:leading-9 tracking-px text-body gg-dark:text-neutral-100\">The SEC letter offers the latest <a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/decrypt.co\/250846\/republican-lawmakers-urge-sec-rescind-controversial-crypto-rule-again\" target=\"_blank\" class=\"sc-adb616fe-0 bJsyml\">shift<\/a> from the SEC&#8217;s less forgiving approach to crypto under former Chair Gary Gensler, who sought to limit the types of organizations that could custody digital assets.<\/p>\n<p class=\"font-meta-serif-pro scene:font-noto-sans scene:text-base scene:md:text-lg font-normal text-lg md:text-xl md:leading-9 tracking-px text-body gg-dark:text-neutral-100\">In July, current Chair Paul Adkins unveiled\u00a0<a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/decrypt.co\/333001\/sec-chair-paul-atkins-project-crypto-icos-airdrops\" target=\"_blank\" rel=\"noopener\" class=\"sc-adb616fe-0 bJsyml\">\u201cProject Crypto,<\/a> an SEC initiative <a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/decrypt.co\/340898\/sec-chair-paul-atkins-crypto-innovation-exemption-coming-this-year\" target=\"_blank\" class=\"sc-adb616fe-0 bJsyml\">to dramatically lower<\/a> regulatory burdens for the crypto industry and to accelerate the integration of digital assets within the traditional U.S. economy.<\/p>\n<p class=\"font-meta-serif-pro scene:font-noto-sans scene:text-base scene:md:text-lg font-normal text-lg md:text-xl md:leading-9 tracking-px text-body gg-dark:text-neutral-100\">The Investment Advisers Act of 1940 requires that advisors maintain client assets with a bank, trust or other qualified custodian holding national fiduciary duties. Crypto supporters have used this legislation to enable a wider range of crypto initiatives.<\/p>\n<p class=\"font-meta-serif-pro scene:font-noto-sans scene:text-base scene:md:text-lg font-normal text-lg md:text-xl md:leading-9 tracking-px text-body gg-dark:text-neutral-100\">The letter is not a formal rule or regulation and therefore has &#8220;no legal force or effect&#8221; or &#8220;alter or amend applicable law,&#8221; the SEC noted.<\/p>\n<p class=\"font-meta-serif-pro scene:font-noto-sans scene:text-base scene:md:text-lg font-normal text-lg md:text-xl md:leading-9 tracking-px text-body gg-dark:text-neutral-100\">But the agency made advisors responsible for ensuring that a registered trust is authorized by relevant banking authorities to provide crypto custody services and has written policies and procedures to protect those assets, addressing such issues as private key management.<\/p>\n<p class=\"font-meta-serif-pro scene:font-noto-sans scene:text-base scene:md:text-lg font-normal text-lg md:text-xl md:leading-9 tracking-px text-body gg-dark:text-neutral-100\">Custodial agreements that advisors sign should also ensure that the trust will not lend or otherwise use funds without a client&#8217;s consent, and that crypto assets &#8220;will be segregated from the State Trust Company\u2019s assets.&#8221;<\/p>\n<p class=\"font-meta-serif-pro scene:font-noto-sans scene:text-base scene:md:text-lg font-normal text-lg md:text-xl md:leading-9 tracking-px text-body gg-dark:text-neutral-100\">Trusts may serve as custodians, provided &#8220;the Registered Adviser determines that the use of the State Trust Company\u2019s custody services is in the best interest of the RIA Client or Regulated Fund and its shareholders,&#8221; the SEC letter said.<\/p>\n<p class=\"font-meta-serif-pro scene:font-noto-sans scene:text-base scene:md:text-lg font-normal text-lg md:text-xl md:leading-9 tracking-px text-body gg-dark:text-neutral-100\">The letter drew praise from Bloomberg ETF Analyst James Seyffart, who in an X post <a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/x.com\/JSeyff\/status\/1973126001048608935\" target=\"_blank\" rel=\"nofollow external noopener\" class=\"sc-adb616fe-0 bJsyml\">wrote<\/a> it was &#8220;a textbook example of more clarity for the digital asset space.&#8221;<\/p>\n<p class=\"font-meta-serif-pro scene:font-noto-sans scene:text-base scene:md:text-lg font-normal text-lg md:text-xl md:leading-9 tracking-px text-body gg-dark:text-neutral-100\">&#8220;Exactly the sort of thing the industry was asking for over the last few years,&#8221; he wrote. &#8220;And it keeps coming.&#8221;<\/p>\n<div class=\"my-4 border-b border-decryptGridline\">\n<div class=\"text-start p-8 md:py-12 md:px-12 max-w-prose relative\"><span class=\"border-t-4 border-l-4 w-4 h-4 md:border-t-[6px] md:border-l-[6px] md:w-6 md:h-6 border-decryptPurple dark:border-decryptNeon gg-dark:border-cc-pink-2 absolute top-4 left-4 md:top-6 md:left-6\"\/><span class=\"border-t-4 border-l-4 w-4 h-4 md:border-t-[6px] md:border-l-[6px] md:w-6 md:h-6 border-decryptPurple dark:border-decryptNeon gg-dark:border-cc-pink-2 absolute rotate-180 bottom-4 right-4 md:bottom-6 md:right-6\"\/><\/p>\n<h3 class=\"font-akzidenz-grotesk font-bold text-xl md:text-3xl md:text-center gg-dark:text-white\">Daily Debrief<!-- --> Newsletter<\/h3>\n<p>Start every day with the top news stories right now, plus original features, a podcast, videos and more.<\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>In brief The SEC will not take enforcement actions against advisors and other entities for using state-chartered as crypto custodians. This letter could lead to a potential opening for a greater number of organizations to serve as custodians for digital assets. In July, Chair Paul Adkins unveiled\u00a0\u201cProject Crypto, an SEC initiative to dramatically lower regulatory [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":404059,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[230,225,221,227,226,228,229,60,223,224,222],"class_list":["post-406728","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency","tag-brave","tag-coinbase","tag-crypto","tag-decentralised","tag-decentralized","tag-decentralized-exchange","tag-erc-20","tag-featured","tag-meme-coin","tag-robinhood","tag-solana"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/406728","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=406728"}],"version-history":[{"count":1,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/406728\/revisions"}],"predecessor-version":[{"id":406729,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/406728\/revisions\/406729"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/404059"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=406728"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=406728"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=406728"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}