Thoughts
SEC No-Action Relief for State Trust Companies Custodying Digital Assets
The SEC is beginning to align its custody framework for digital assets with industry practice. The SEC’s Division of Investment Management has issued a no-action letter confirming that certain state-chartered trust companies may serve as qualified custodians for digital assets and related cash equivalents under the Investment Advisers Act and the Investment Company Act. This means that registered investment advisers and funds can now custody crypto assets with eligible state trust companies, entities the SEC staff is now willing to treat as “banks” for custody purposes.
SEC’s DoubleZero No-Action Letter: What It Means for Crypto Law
The SEC is increasingly pro-crypto now. On September 29 2025, the SEC’s Division of Corporation Finance issued no-action relief to the DoubleZero Foundation, clearing its planned token distributions from the registration requirements of Section 5 of the Securities Act and Section 12(g) of the Exchange Act. This puts DoubleZero alongside projects such as TurnKey Jet, Pocketful of Quarters, and IMVU, a small group that has received similar relief for token distributions with clear, functional use cases.
The 411 on Money Transmission
Most people think money transmission laws only apply to banks, payment processors, or companies moving billions through the financial system. They’re wrong. If your product accepts any form of value (cash, crypto, stored value, loyalty points, stablecoins) and sends it somewhere else, even if that “somewhere” is just another person’s digital wallet, you might be a money transmitter. And that label changes everything.