News & Events

Partner Justin Browder was quoted in a Hedge Fund Law Report article, which discussed the September 30, 2025 no-action letter issued by the SEC’s Division of Investment Management to Simpson Thacher in which the Division that indicated it would not recommend enforcement action against RIAs and regulated funds that treat a state trust company as a bank for purposes of applying the custody provisions under the Investment Advisers Act and the 1940 Act to crypto assets.  These provisions generally require RIAs and regulated funds to utilize “banks”, as defined under the statutes, and other regulated intermediaries as custodians. Justin, who was one of the authors of the no-action request letter, explained, “The definition of a ‘bank’ is challenging to work with, as applied to anything other than a national bank… When it comes to state-chartered banks, it becomes more challenging, particularly in the case of state trust companies.” In discussing the impact of the no-action letter, he indicated, “The Letter doesn’t absolve advisers from following their standard vendor diligence procedures, but it does present minimum standards when it comes to engaging a state-chartered trust company.”

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