Important highlights
- The US SEC allows investment advisors to custody crypto assets using a qualified national chartered trust company;
- However, updating this new policy requires state trusts to comply with strict operating standards.
- This decision is expected to attract institutional capital by providing investment advisors with a way to access crypto.
On September 30, the Securities and Exchange Commission (SEC) announced that investment advisors are currently permitted to detain nationally chartered trust companies and cryptocurrency assets.
There are no actions I’ve heard today. @caitlinlong_ !!!!!!The new custodian of crypto rules. No execution.
This means there are more crypto admins coming. Great news for crypto adoption.
Important questions under SEC rules, investment advisors and funds are… pic.twitter.com/5rc7zldpyl
– Martyparty (@martypartymusic) September 30, 2025
The decision will break a longtime block that prevents large institutional funds from flowing freely into the crypto market.
Changes in SEC’s cryptocurrency regulation stance
In the past, a rule known as the “custody rules” required investment advisors to hold client assets as “qualified custodians.” These are usually large federally regulated banks.
However, the majority of these traditional banks view asset classes as too new and risky and are hesitant to provide deep crypto custody services. They also cited the volatile nature that could cause financial instability.
This created a major hurdle. Financial advisors who wanted to invest in Bitcoin or Ethereum for their clients had few approved locations to securely hold these assets.
But now, the new SEC guidance addresses this issue directly by making it clear that states can qualify trusts as custodians if they meet certain criteria.
in Official StatementSecurities and Exchange Commission staff provide very important guarantees to the industry. They confirmed that they would not advise the committee to take enforcement action against investment advisors who use qualified national chartered trust companies as managers of crypto assets. They treat them effectively like traditional banks.
However, there are several criteria for qualifying as a custodian in crypto assets. In this context, the investment advisor must undergo a continuous verification process to ensure that the trust companies in the selected state are fully accredited. This due diligence is an annual requirement, not a one-time event.
The first step is to formally confirm that the trust company holds a valid license from the state banking authority, particularly for the management of crypto assets. This official charter provides evidence of the legal right to operate.
SEC updates Crypto’s custodian rules
This policy change did not come out of blue. This is the result of the SEC’s continued efforts to modernize the rules of the digital age. One of the main parts of this was the 2023 proposal for a new “protective regulations.”
The proposal was expected to enhance protection for all client assets, but also raised concerns that the crypto industry could make existing crypto platforms even more difficult.
The latest actions in the SEC can be considered a practical response. By officially recognizing state trust companies, regulators are creating viable and regulated solutions for agencies to engage in crypto without compromising security.
This decision examines the business model of the company that is ready for this moment. State chartered trust institutions such as the Coinbase Custody Trust Company and Anchorage Digital Bank in New York already operate under strict state-level banking regulations.
They have built sophisticated systems to securely store digital assets such as Bitcoin and Ethereum. It shows that the SEC can provide the level of safety they need. The announcement officially takes them there as approved partners in the investment advisory world.
The SEC’s decision is also closely monitored on the international stage. The actions of major markets like the US carry enormous weight as global financial regulators work to create standards for the borderless crypto industry.
The European Union has the recently passed MICA framework and has already established its own custody rules for crypto assets.