North Capital Investment Technology, Inc. announced that its subsidiary, North Capital Trust Company, has received a Charter and Certificate of Authority from the South Dakota Division of Banking to operate as a Public Trust Company. This development allows the firm to expand its custody services beyond private securities into digital assets, including tokenized securities, through its recently launched North Capital Token Services, LLC.
The trust company charter addresses regulatory challenges that emerged when the Securities and Exchange Commission and FINRA issued the Joint Staff Statement on Broker-Dealer Custody of Digital Asset Securities approximately six years ago. That statement, which was withdrawn last year, effectively prohibited clearing and carrying broker-dealers like North Capital Private Securities Corporation from serving as custodians for digital asset securities. North Capital's broker-dealer had received approval as a clearing and carrying firm in 2016, making the Joint Statement a significant setback for the firm's digital strategy.
Trust companies have become preferred vehicles for custody of both tangible and digital assets because they can fulfill statutory requirements for registered investment advisors, registered funds, and qualified accounts including IRAs, ROTH IRAs, HSAs, and 401k plans. While broker-dealers are no longer precluded from holding digital asset securities for customers, North Capital believes the trust company structure provides greater flexibility to meet evolving market needs. More information about the company is available at https://www.northcapital.com.
The importance of this development lies in its potential to bridge regulatory gaps in the digital asset custody space. As digital securities and tokenized assets gain traction, institutional investors and registered intermediaries require qualified custodians that can navigate complex regulatory frameworks. The trust company model offers a solution that complies with existing regulations while accommodating innovative financial products.
North Capital Trust Company operates as a South Dakota public non-depository trust company, not an FDIC-insured bank. Services will be offered subject to applicable law, approvals, and documentation, and the charter does not mean products or services are available in every jurisdiction or to every customer. The firm's broker-dealer affiliate, North Capital Private Securities Corporation, remains registered with the SEC and is a member of FINRA and SIPC, with information available through FINRA BrokerCheck.
This expansion into trust company services represents North Capital's strategic response to regulatory changes and market demands for secure custody solutions in the digital asset ecosystem. The company began exploring the trust company formation six years ago in response to regulatory developments and now positions itself to serve custody clients more comprehensively in a rapidly evolving financial landscape.
