SEC The letter without action creates the opening for more companies to serve as cryptographic custodians

The US stock and securities commission. UU. He said in a letter on Tuesday that he did not plan to take measures against registered investment advisors, emitters of cryptographic funds and other entities to use state estimated trustees to keep digital assets.

The updated orientation, a response from the SEC Investment Management Division to a consultation presented by lawyers representing financial advisors, creates a possible opening so that a greater number of organizations will serve as custodians for these assets, including the affiliates of prominent companies focused on encryption such as Coinbase and Ripple.

“Based on … its letter, the investment management division would not recommend compliance actions … against a registered advisor or a regulated fund to treat a state fiduciary company such as a ‘bank’ related to the placement and maintenance of cryptographic assets and the related cash and/or cash equivalents,” said the SEC letter, provided that the advisor and the trust are met both the criteria and the criteria.

The SEC letter offers the last change of the less indulgent approach to the SEC to the cryptography under former President Gary Gensler, who sought to limit the types of organizations that could guard digital assets.

In July, the current president Paul Adkins announced the “Crypto Project, an initiative of the SEC to drastically reduce regulatory loads for the cryptographic industry and accelerate the integration of digital assets into the traditional economy of the United States.

The Investment Advisors Law of 1940 requires that the advisors keep assets of customers with a bank, trust or other qualified custodian that has national fiduciary duties. Crypto supporters have used this legislation to allow a broader range of cryptographic initiatives.

The letter is not a formal rule or regulation and, therefore, “it has no strength or legal effect” or “altere or amends the applicable law,” said the SEC.

But the agency was responsible for the advisors to ensure that a registered trust is authorized by the relevant banking authorities to provide cryptographic custody services and has written policies and procedures to protect these assets, addressing issues such as private key administration.

The custody agreements that the advisors sign must also guarantee that the trust will not provide or use funds without the consent of a client, and that the encryption assets “will be secured of the assets of the state trust company.”

Trusts can serve as custodians, provided that “the registered advisor determines that the use of the custody services of the state fiduciary company is the best for the client or the regulated fund of RIA and its shareholders,” said the letter of the SEC.

The letter received praise from the Bloomberg Etf James Seyffart analyst, who wrote it in an “more clarity textbook for the digital asset space”.

“Exactly the kind of things that the industry was asking in recent years,” he wrote. “And keep coming.”