The SEC issued a no-action letter with respect to the custody provisions of the Investment Advisers Act (Section 206(4) and Rule 206(4)-2) and the Investment Company Act (Section 17(f) and 26(a) and rules thereunder) (referred to collectively as "the Custody Rules"). The no-action letter, submitted by Simpson Thacher & Barlett LLP, requested assurance that the SEC would not seek enforcement action against registered investment advisers and regulated funds that treat a state trust company as a "bank" with respect to the placement and maintenance of crypto assets and cash and/or cash equivalents reasonably necessary to effect transactions in crypto assets. This would effectively enable advisers and funds to utilize state trust companies as qualified custodians permitted to hold or custody assets under the Custody Rules. The no-action request noted that state trust companies are critical providers of custody services for crypto assets and related cash and/or cash equivalents and have implemented sophisticated controls to ensure safekeeping of such assets. Accordingly, the SEC granted the no-action relief based upon a number of conditions intended to ensure safekeeping of crypto assets. For investment advisers seeking to rely on this no-action position, we suggest that firms update their custody policies and procedures to include the terms and conditions of the no-action letter and the steps firm will take to ensure that they comply with such provisions. We further recommend that such firms update service provider due diligence procedures and related documentation with respect to any state trust company custodians utilized in reliance on such no-action position.