North Capital Trust Company Secures South Dakota Public Trust Charter to Expand Digital Asset Custody Services

North Capital Investment Technology, Inc. announced that its wholly owned subsidiary, North Capital Trust Company, has received from the South Dakota Division of Banking a Charter and Certificate of Authority to transact business as a Public Trust Company. The charter positions the company to better serve custody clients and expand services beyond private securities, with operations expected to commence over the next few months. Trust companies have emerged as a preferred vehicle for supporting custody of tangible and digital assets, including tokenized securities, as North Capital has been expanding its activities in digital asset securities through its recently launched North Capital Token Services, LLC.

The company's exploration of trust company formation began approximately six years ago when the Securities and Exchange Commission and FINRA issued the Joint Staff Statement on Broker-Dealer Custody of Digital Asset Securities. Under the terms of that statement, which was withdrawn last year, clearing and carrying broker-dealers were practically prohibited from serving as custodians for digital asset securities. North Capital Private Securities Corporation, the firm's custodial broker-dealer, had previously received approval as a clearing and carrying firm in 2016, making the Joint Statement a setback for the company's digital strategy.

Investors and registered intermediaries rely upon qualified custodians to fulfill statutory requirements applicable to registered investment advisors, registered funds, and qualified accounts such as IRAs, ROTH IRAs, HSAs, and 401k Plans. Although broker-dealers are no longer precluded from holding digital asset securities on behalf of customers, North Capital believes the trust company structure will provide flexibility to more fully meet evolving customer needs in a rapidly changing market environment. The company maintains that no regulatory agency, including the U.S. Securities and Exchange Commission, FINRA, or the South Dakota Division of Banking, has approved, endorsed, or recommended North Capital, its affiliates, or any product or service described in their announcement.

North Capital Trust Company operates as a South Dakota public non-depository trust company, meaning the charter does not automatically make every product or service available in all jurisdictions or to every customer, with services offered subject to applicable law, approvals, and documentation. The trust company is not an FDIC-insured bank, distinguishing it from traditional banking institutions. Meanwhile, North Capital Private Securities Corporation remains a broker-dealer registered with the U.S. Securities and Exchange Commission and a member of FINRA and SIPC, with more information available through FINRA BrokerCheck and on the company's website. This development represents a strategic move to navigate complex regulatory landscapes while expanding service offerings in the growing digital asset custody market.