Cryptocurrency and other new and emerging technologies provide opportunities for innovative companies to thrive. However, it can sometimes be hard for regulators to catch up to new technologies. South Dakota has a robust and favorable trust and trust company regulatory climate, and there have been some exciting new regulatory developments for trust companies in South Dakota, particularly in the new technology and digital asset space. Davenport Evans lawyers Ashley Blake and Terry Prendergast explain.
South Dakota has become known for its trust laws that regularly lead the nation for their content, with the state consistently named as a best jurisdiction for trust situs purposes. With over 100 state charted non-depository trust companies — regulated primarily through the South Dakota Division of Banking — South Dakota has become a leader for trust companies in addition to being a leader for trusts. Recent trust company charters issued by the South Dakota Division of Banking, which include two state trust company charters for institutional cryptocurrency custodians (Bitgo Trust Company and Anchorage Trust Company), further illustrate the forward-thinking approach to new technology and innovation that the South Dakota banking regulators have taken.
In fact, when speaking about the business climate in South Dakota and the South Dakota Division of Banking, South Dakota Senator Mike Rounds recently stated at a Senate Banking Committee meeting on July 16, 2019: “Our Division of Banking should serve as a model for how governments can study and learn about digital currencies, while at the same time allowing pioneering companies like Anchorage to innovate and try out new products and services.”
The time to charter a trust company that utilizes new and emerging technologies is better now than it has ever been prior, and those wishing to start the process of obtaining a charter for a cryptocurrency trust company should be aware that although such an applicant will be subject to extensive requirements and review, the South Dakota Division of Banking has shown a willingness to consider and regulate companies in the cryptocurrency, digital asset, and new technology space, and continues to refine its processes in order to help such companies achieve success. The Davenport Evans team has experience in helping obtain charters for digital asset, new technology, and cryptocurrency trust companies and can guide applicants through the South Dakota non-depository trust company charter process.
If you would like more information about chartering a trust company and Davenport Evans trust company lawyers, please see the Davenport Evans Trust Companies page.