On September 30, 2025, the Office of the Chief Counsel of the SEC’s Division of Investment Management (Division) released a no-action letter (Letter) stating that – subject to strict conditions – it will not recommend enforcement actions against registered investment advisers and regulated funds that treat a state trust company as a bank for purposes of holding and maintaining crypto assets and related cash and cash equivalents. The Division issued the Letter in response to a request for no-action relief from lawyers at Simpson Thacher & Bartlett LLP, who argued that state trust companies are sufficiently well-regulated and operationally analogous to banks to be treated similarly for the purpose of holding crypto assets and that uncertainty about the legality of placing such assets with them needs to be dispelled. This article summarizes the Letter and the principal arguments for and against it, with commentary from legal experts. See our two-part coverage of an SEC Crypto Roundtable: “Digital Asset Custody Challenges” (Jun. 5, 2025); and “Potential Digital Asset Custody Models” (Jun. 19, 2025).