News

SEC Issues Guidance Enabling Ripple, Coinbase, BitGo to Qualify as Custodians

SEC issues guidance enabling Ripple, Coinbase, and BitGo to act as qualified custodians, boosting regulated crypto custody.
Published by
SEC Issues Guidance Enabling Ripple, Coinbase, BitGo to Qualify as Custodians

Highlights

  • SEC guidance lets Ripple, Coinbase, BitGo qualify as crypto asset custodians.
  • State-chartered trust companies recognized as banks under federal custody framework.
  • Lawyers call SEC move a milestone for expanding regulated digital asset custody.

The U.S. Securities and Exchange Commission (SEC) has issued a new guidance. This allows investment advisers to use state-chartered trust companies as qualified custodians for crypto assets. The move came through a no-action letter after a request from Simpson Thacher & Bartlett LLP.

Advertisement

SEC Guidance Clears Path for Crypto Firms to Act as Custodians

Under the Investment Advisers Act of 1940 as stated in the SEC document, advisers must hold client funds with a qualified custodian. Typically, this can be a national bank or federally recognized trust company. Until now, there was uncertainty about whether state-chartered trust companies fit that definition.

The new SEC guidance confirms they can be treated as “banks” under federal law if certain safeguards are followed. Advisers must confirm internal controls, and check that trust companies undergo regular audits. They must also disclose risks to clients and confirm custody agreements are in the best interest of investors. The SEC is also advancing rules on on-chain stock trading as part of its tokenization push.

This allows leading crypto businesses to engage in more custody activities. As such, Coinbase, Ripple through Standard Custody, BitGo, and WisdomTree, may now perform the role of custodian for registered funds and advisers. This provides regulated markets with a more convenient exposure to crypto and creates more infrastructure for digital assets.

Advertisement

Lawyers Hail SEC Guidance as Milestone for Digital Asset Custody

Brian Daly, Director of the SEC’s Division of Investment Management, said the clarification was needed because state trust companies had not been consistently recognized. The SEC guidance provides additional comfort to funds and advisers seeking to expand into digital asset markets, reflecting how crypto remains a top SEC priority.

Industry lawyers welcomed the move. Justin Browder, a partner at Simpson Thacher, said the SEC’s position offers “important assurances to money managers and funds” and helps sustain investment in the asset class. He credited SEC staff for constructive engagement that made the outcome possible.


The Commission stressed that the letter reflects staff views only. This is not a strict rule and may change in the future. Nonetheless, the SEC guidance marked a considerable achievement in bringing crypto custody into traditional monetary framework.

Advanced protections, such as cold storage, encryption and independent audit, are already available to State-chartered trust companies. Hence, they can easily start offering their services to institutional clients who need to protect their funds based on the new SEC guidance.

Advertisement

Share
Paul

Paul Adedoyin is a crypto journalist with 4+ years experience who provides timely news, in-depth research, and insightful content to inform and empower his audience. His works have been featured on sites such as CryptoMode, CryptoNewsFlash among others. He holds a degree in Geophysics from OAU, Nigeria. When he's not writing, he loves watching soccer and reading educative journals. He can be reached via paul@coingape.com

Published by
Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Recent Posts

  • Altcoin News

Aster Outpaces Lighter in Perp DEX Rankings as Wintermute Buys the Dip After Previous Dump

Aster is regaining momentum in the perp DEX space as it outpaces Lightchain in 24-hour…

October 21, 2025
  • Bitcoin News

Is This Final Bitcoin Price Correction Before US Shutdown Ends, Fed Rate Cuts?

Bitcoin price and the broader crypto market are facing yet another selling pressure today, triggering…

October 21, 2025
  • News

Blockchain for Good Alliance and UNDP AltFinLab Launch Blockchain Impact Forum

DUBAI, United Arab Emirates, Oct.20, 2025 — The Blockchain for Good Alliance (BGA), a flagship…

October 21, 2025
  • News

‘Trump Insider Whale’ Increases Bitcoin Short As U.S. Counters China in New Australia Deal

The “Trump insider whale” has once again increased its bearish bets on BTC. This comes…

October 21, 2025
  • Uncategorized

Trump Advisor Hints US Government Shutdown Could End This Week, Opening Door for XRP ETF Ruling

One of Trump’s advisers has hinted that the US Government shutdown could come to an…

October 21, 2025
  • Ethereum News

Ethereum’s Vitalik Buterin Responds to Allegations of Excessive Control By ETH Inner Circle

Ethereum core developer Péter Szilágyi has publicly shared a letter he sent to the ETH…

October 21, 2025