US securities regulator probes Wall Street over crypto custody: Report
The United States Securities and Exchange Commission (SEC) has been probing traditional Wall Street investment advisors that may be offering digital asset custody to its clients without the proper qualifications.
A Jan. 26 Reuters report citing “three sources with knowledge of the inquiry” said the SEC’s investigation has been going on for several months already but accelerated after the collapse of crypto exchange FTX.
The investigations by the SEC have not been known previously before as the agency’s inquiries are not public, said the sources.
As per the Reuters report, much of the SEC’s efforts in this inquiry are looking into whether registered investment advisors have met the rules and regulations around the custody of client crypto assets.
By law, investment advisory firms must be “qualified” to offer custody services to clients in addition to complying with custodial safeguards set out in the Investment Advisers Act of 1940.
Cointelegraph reached out to the SEC to seek clarity 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 best execution when trading securities, whether equities, fixed income, options, crypto security tokens, or other securities. pic.twitter.com/gZdIEcNbVY
The recent revelation suggests the SEC hasn’t turned a blind eye to traditional investment firms in the digital asset space, Anthony Tu-Sekine said, who leads Seward and Kissel's Blockchain and Cryptocurrency Group in a note to Reuters:
"I think it's an easy call for the SEC to make,” he added.
Related: Senator Warren proposes reducing Wall Street’s involvement in crypto
On Nov. 15, the Wall
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