🚨BREAKING: The @SECGov has issued a no-action letter saying that investment advisers can use state-chartered trust companies as qualified custodians for crypto assets. What does this mean? Under the Investment Advisers Act of 1940, advisers must keep client assets with a qualified custodian, usually a bank or a trust company with national fiduciary powers. This guidance gives investment advisers and registered funds comfort that they can use a state trust company to custody crypto assets. “This additional clarity was needed because state-chartered trust companies were not universally seen as eligible custodians for crypto assets,” Brian Daly, Director of the SEC’s Division of Investment Management told me. Under this new staff guidance, state-chartered trust companies can now qualify for crypto custody if investment advisers do their due diligence and deem it in clients’ best interests. Why does it matter? It opens the door for more players in the crypto custody market as well as broader access for funds to custody crypto. Players such as @coinbase, @Ripple (through @StandardCustody), @BitGo, @WisdomTreeFunds and others will be recognized as qualified custodians. “This is a staff letter, so at some point, this topic could be addressed by future rulemaking, Daly said. “We believe the market will benefit from having this guidance for today’s products, today’s managers, and today’s issues.”(Eleanor Terrett)