South Dakota’s long history of attracting trust companies has added a new chapter: An emerging niche of companies specializing in holding cryptocurrency.

Anchorage, which launched two years ago in San Francisco, has formed Anchorage Trust Company, which received its charter from the South Dakota Division of Banking in July. It formally opens an office at 4901 S. Isabel Place with a 4:30 p.m. ribbon cutting Sept. 9.

“We are a custodian for institutional investors looking to take large positions in crypto assets,” co-founder Nathan McCauley said.

“A custodian holds assets for people, and we do that in a secure and regulated way.”

It’s a public trust company with clients that include hedge funds, family offices and others “looking to allocate a significant amount of assets into cryptocurrency,” McCauley said.

He said the company holds hundreds of millions in assets “and we have quite a large amount of demand for our services” as investors have been attracted to the new asset class and as a way to diversify portfolios.

McCauley credited the South Dakota Division of Banking with creating regulatory clarity for cryptocurrency businesses.

“They have clearly decided to invest in this area and have created a regulatory structure multiple companies can fit into,” he said. “It’s a flexible environment that a number of companies have come in, so that’s pretty exciting.”

The division is being open minded in this area, as it has been to new business models in the past such as self-directed IRA custodians and Registered Investment Advisors getting into the custody business, said Bret Afdahl, director of the division of banking.

“We are watching this area very closely for performance, new developments, and emerging risks,” he said. “It is a quickly evolving sector and we are proceeding very cautiously.”

Other cryptocurrency-related trust companies in the state include BitGo, which also is based in California and has an office at 6216 S. Pinnacle Place that opened last year.

Anchorage has a two-person staff in Sioux Falls for now and is hiring a compliance associate and client experience manager. But McCauley encouraged others to reach out, as the office is expected to grow. It’s also equipped to regularly conference with the California team.

“We are looking for capable people in trust administration, in compliance and in software engineering.” he said, adding that holding cryptocurrency is inherently an engineering and software development focused path.

“We’re looking to build out the office there and would love to invite people … who might be interested in new roles and looking to get involved in an exciting new industry.”