# SEC investment-management staff permits conditional use of state trust companies for crypto custody

> Investment Management staff provided conditional no-action relief allowing registered advisers and regulated funds to treat certain state-chartered trust companies as permissible bank custodians for crypto assets and related cash.

- URL: https://riadefi.com/regulation/2025-09-30-sec-state-trust-company-crypto-custody-no-action/
- Posture: Guidance
- Authorities: SEC Division of Investment Management
- Event date: 2025-09-30
- Version: 1, published 2026-08-07 (first published 2026-08-07)
- Advisor-relevant: yes

## What changed

Investment Management staff provided conditional no-action relief allowing registered advisers and regulated funds to treat certain state-chartered trust companies as permissible bank custodians for crypto assets and related cash. The relief depends on due inquiry, written agreements, segregation, financial and control reporting, risk disclosure, and a best-interest determination.

## Who it affects

- SEC-registered investment advisers with custody of client crypto assets
- Registered funds and business development companies
- State trust companies and advisory clients

## What is still open

- Commission rulemaking on adviser and fund custody
- How advisers will evidence state-law status, control quality, solvency, segregation, and continued eligibility

## What it means for an advisor

- Build a documented annual due-inquiry and best-interest process before relying on the relief
- Obtain and review governing law, audited financials or control reports, segregation, rehypothecation, insurance, key-control, incident, insolvency, and termination terms

## Previous interpretation

Advisers and funds faced substantial uncertainty over whether a state trust company qualified as a bank for the covered crypto custody provisions.

## Sources

1. [Simpson Thacher & Bartlett LLP — State Trust Company Crypto Custody No-Action Response](https://www.sec.gov/rules-regulations/no-action-interpretive-exemptive-letters/division-investment-management-staff-no-action-interpretive-letters/simpsonthacherbartlett093025) · SEC Division of Investment Management · 2025-09-30


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Published by Ketju Research on RIADeFi (https://riadefi.com). Educational research for financial professionals; not investment, legal, tax, or compliance advice.