The US SEC allows investment advisers to use state trust companies as crypto custodians in a rare no-action letter. This marks the second no-action letter from the SEC this week, showing a hands-off approach to crypto enforcement under the Trump administration. Law firm Simpson Thacher & Bartlett requested this assurance from the SEC.

SEC staff outlined specific criteria for state trust companies to act as custodians, including safeguarding crypto assets and performing due diligence. This move is seen as an interim step to broader changes in custody requirements. Commissioner Hester Peirce praised the guidance, saying it eliminates uncertainty for advisers and fund managers choosing custodians for crypto assets.

The SEC plans to propose amendments to custody rules, allowing for more flexibility in asset custody. This decision was well-received by analysts and industry figures who believe it will provide much-needed clarity for the digital asset space. Crypto trader Marty Party and Senator Cynthia Lummis both expressed support for the SEC’s letter.

However, SEC Commissioner Caroline Crenshaw criticized the letter, arguing that changes to existing rules should be made through formal rulemaking with public comment and economic analysis. She believes the Division’s decision disadvantages applicants seeking national charters for crypto custody services. Crenshaw stressed the importance of trust in custodianship decisions.

Read more at Cointelegraph.: SEC Open to Advisers Using State Trusts for Crypto Custody