The Investment Adviser Act is a United States federal law that governs the regulation of investment advisers. It mandates registration with the Securities and Exchange Commission for certain advisers and imposes fiduciary duties, requiring them to act in the best interests of their clients. The Act aims to protect investors from fraud and deceptive practices in investment advice.
Context
The Investment Adviser Act holds significant relevance for entities providing advice on digital assets, particularly if those assets are deemed securities. News frequently covers SEC guidance and enforcement actions related to crypto firms operating as unregistered investment advisers. The ongoing debate centers on how the Act’s provisions apply to decentralized protocols and new forms of digital asset advisory services, prompting calls for clearer regulatory interpretations.
The No-Action Letter provides a crucial regulatory pathway for Registered Investment Advisers to custody digital assets with state-chartered trust entities.
The SEC Staff's No-Action Letter permits RIAs and Regulated Funds to use State Trust Companies as Qualified Custodians for digital assets, structurally de-risking institutional adoption.
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