The US Securities and Exchange Commission (SEC) has opened the door for investment advisors to use state-authorized trust companies to protect crypto assets.
The agency issued a no-action letter on Tuesday stating that such trusts can be considered qualified custodians.
This decision effectively allows financial institutions operating under the Investment Advisers Act of 1940 to hold cryptocurrencies such as Bitcoin and Ethereum in state trust companies, treating them similarly to cash.
The move provides a clearer and more regulated path for traditional investment firms to engage in cryptocurrencies on behalf of their clients.
James Seyffart, an analyst at Bloomberg Intelligence, said:
"This is a textbook example of more clarity for the digital asset space. Exactly the sort of thing the industry was asking for over the last few years. And it keeps coming."