SEC Guidance Opens Custody Role To Ripple, Coinbase, BitGo

The U.S. Securities and Exchange Commission has provided new guidance confirming that state-chartered trust companies can qualify as custodians for crypto assets under the Investment Advisers Act of 1940.

The clarification, issued via a no-action letter, follows a request from Simpson Thacher & Bartlett LLP and resolves uncertainty about whether such entities fit the definition of “banks” under federal law.

Advisers must meet strict safeguards, including ensuring internal controls, verifying regular audits, and disclosing risks to clients.

This opens the door for major crypto players such as Coinbase, Ripple (through Standard Custody), BitGo, and WisdomTree to act as custodians for regulated investment advisers and funds.

The change enhances access to compliant crypto custody and adds infrastructure for digital assets within traditional finance.

At the same time, the SEC is advancing its exploration of on-chain stock trading and tokenization, signaling its intent to adapt regulatory frameworks to evolving financial technologies.

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