SEC Proposes Letting More Investment Firms Custody Crypto Assets

The proposal reframes custody as a capacity problem rather than a permission problem: by letting advisers fall back to less conventional custodians when no qualified one is available, it acknowledges that the bottleneck has been the supply of regulated holders, not demand. State trust companies stand to gain the most, since they gain a federal path into a business dominated by banks and brokerages. The open question is whether the "no other qualified custodian available" test becomes a workable standard or a litigation magnet, and how state regulators react to their charters being used this way.