SEC OKs Custody via State Trusts for Crypto, Exempts DePIN
U.S. SEC Division of Investment Management issued a no-action letter allowing registered investment advisers to use state-chartered trust companies for crypto custody. Under interim relief, advisers must conduct due diligence, implement robust asset-protection procedures and document oversight to secure private keys. The guidance clarifies custody standards under the Investment Advisers Act and Investment Company Act. It follows a request by Simpson Thacher & Bartlett and aligns with the SEC’s custody rule review. The SEC also stated it will not enforce actions against tokens linked to Decentralized Physical Infrastructure Networks (DePIN). This move expands digital asset custody options and signals upcoming formal rule updates. Advisers should review policies and prepare for amendments as the agency modernizes its crypto custody framework.
Bullish
The SEC’s approval of crypto custody via state-chartered trust companies reduces regulatory uncertainty and increases available custodian options. This expanded infrastructure can boost institutional inflows and improve market confidence. The DePIN token enforcement exemption further clarifies token treatment, easing compliance concerns. In the short term, the news may attract new capital and trading volume as advisers prepare to onboard assets. Long-term, formal rule updates and modernized custody frameworks could reinforce institutional adoption and support sustained growth in the crypto market.