Regulators are investigating how registered investment advisors offer cryptocurrency custody to their clients, sources said.
The U.S. Securities and Exchange Commission (SEC) is investigating traditional Wall Street investment managers who may offer custody of digital assets to their clients without proper entitlement.
A Jan. 26 Reuters report, citing “three sources familiar with the investigation,” said the SEC investigation has been ongoing for months, but the collapse of cryptocurrency exchange FTX has not yet been confirmed. He said it was received and accelerated.
The SEC investigation was previously unknown because the agency’s investigation is not public, sources said.
According to a Reuters report, many of the SEC’s efforts in the investigation are investigating whether registered investment advisers comply with rules and regulations governing the custody of their clients’ crypto assets. By law, investment advisers must be “entitled” to provide custody services to their clients, in addition to complying with the custody guarantees outlined in the Investment Advisers Act 1940.
Cointelegraph reached out to the SEC for clarification on the matter but did not receive an immediate response.
If adopted, our best ex rule would help ensure that brokers have policies & procedures in place to uphold one of their most important obligations: to seek the best execution when trading securities, whether equities, fixed income, options, crypto security tokens, or other securities. pic.twitter.com/gZdIEcNbVY— Gary Gensler (@GaryGensler) January 24, 2023
Anthony Tu-Sekine, who heads Seward and Kissel’s blockchain and cryptocurrency group, said in a memo to Reuters that the latest revelations suggest the SEC is not ignoring traditional investment firms in the digital asset space. I’m here.