How Two Ocean Trust and Wyoming Forged the Path for Crypto Custody

On September 30, 2025, the SEC provided long-awaited clarity: it would not recommend enforcement action against registered advisers or funds relying on state trust companies—such as Two Ocean Trust—as qualified custodians for digital assets.

For the first time, state-chartered trust companies are explicitly recognized at the federal level as “banks” under the Investment Advisers Act when custodying crypto assets. The SEC framework requires such firms to be authorized by state regulators, maintain strong internal controls and cybersecurity safeguards, undergo annual audits and SOC reviews, and strictly segregate client assets without rehypothecation.

For us, this was more than validation—it marked the culmination of a five-year journey that began in Wyoming.

In July 2020, with the assistance of McDermott Will & Schulte, we sought a no-action letter from the Wyoming Division of Banking confirming our authority to custody both traditional and digital assets. By October, the Division agreed, designating Two Ocean Trust as a qualified custodian under state law. Their determination was based on careful analysis: much of our business involved fiduciary services—structuring investment products, advising clients, and acting as trustee—comparable to national banks. Just as importantly, Wyoming confirmed that public trust companies like ours would be supervised to bank-grade standards.

This was a milestone for the digital asset industry, but federal uncertainty remained. Weeks later, the SEC issued a statement acknowledging Wyoming’s decision but cautioning that it did not reflect the Commission’s view. Historically, the SEC avoided ruling on whether state trust companies qualified as “banks,” instead inviting broader industry feedback.

For years, the issue lingered. Was a state charter enough to qualify as a custodian under federal law? That question persisted until May 2025, when the SEC withdrew its 2020 statement, signaling that after extensive engagement, it was preparing new guidance.

Those discussions led to the September announcement—a pivotal moment for both our firm and the marketplace. Wyoming’s 2020 framework ultimately became the foundation for the SEC’s 2025 approach. The fiduciary duties and supervisory standards Wyoming adopted at the state level are now the federal baseline.

The path to recognition was neither quick nor simple. But the outcome is what we hoped for: a trusted, regulated framework for digital asset custody. At Two Ocean Trust, we are proud to have helped forge that path, and we believe this clarity will strengthen investor protections and support the responsible growth of the digital asset ecosystem.

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About Us

Two Ocean Trust partners with families to manage multi-generational wealth. We deliver customized investment and trust solutions to ultra-high-net-worth individuals, family offices, and foundations. As a privately owned partnership, independent of other financial institutions, we serve a select number of important relationships, ensuring alignment with our clients’ long-term goals. Based in Jackson Hole, we offer unique access to Wyoming’s tax advantages, modern trust laws, and enhanced privacy protections—helping our clients preserve and grow wealth across generations.