According to the source, the U.S. Securities and Exchange Commission issued a no-action letter related to crypto custody that creates an opening for more firms to serve as custodians, signaling staff would not recommend enforcement when operating under the letter’s specified facts and conditions; source: SEC staff no-action letters (SEC.gov). For traders, expanded eligibility of custodians can increase compliant options for registered investment advisers under the Advisers Act Custody Rule, potentially influencing institutional flows into BTC and ETH via qualified custodians; source: SEC Advisers Act Rule 206(4)-2 and qualified custodian definitions (SEC.gov). Monitor filings and announcements from state-chartered trust companies and banks, as well as custody AUM disclosures, for evidence of onboarding that could affect spot liquidity, spreads, and basis in BTC and ETH; source: custodian regulatory disclosures and SEC oversight framework for qualified custodians (SEC.gov).

According to paulgrewal.eth, the SEC has officially rescinded all unfinished Gensler rule proposals, including 3b16 and the qualified custodian requirements (source: @iampaulgrewal, June 12, 2025). This regulatory rollback removes pending restrictions that would have tightened oversight of crypto custodians and digital asset markets. The decision is expected to reduce compliance burdens for crypto exchanges and institutional investors, potentially increasing liquidity and market participation in the short term. Traders should monitor for increased volatility and renewed activity in regulated crypto assets as the policy shift may signal a more favorable environment for digital asset firms.