SEC commissioners are at odds over a new no-action letter allowing registered investment advisers and funds to custody crypto assets with state-chartered trust companies. Commissioner Hester Peirce endorsed the guidance as a pragmatic step, while Commissioner Caroline Crenshaw criticized it for potentially weakening investor protections. The guidance clarifies how existing custody rules apply to crypto, with Peirce highlighting the role of state trust companies under strong frameworks. Crenshaw expressed concerns about the lack of oversight compared to federally chartered banks and criticized the SEC's approach for bypassing formal rulemaking. Proponents believe the move enhances competition and regulatory clarity.