US securities regulator probes Wall Street on crypto protection: report – Rayrice Forex News

US securities regulator probes Wall Street on crypto protection: report

The United States Securities and Exchange Commission (SEC) has been investigating traditional Wall Street investment advisors who may offer digital asset protection to clients without proper qualifications.

On January 26, Reuters reported that “three sources with knowledge of the matter” said the SEC’s investigation had been ongoing for several months, but was accelerated after the collapse of the crypto exchange FTX.

The agency’s inquiries are not public, the sources said, and the investigation by the SEC is not known in advance.

According to Reuters, much of the SEC’s efforts in this inquiry will focus on whether registered investment advisers are complying with rules and regulations surrounding the safekeeping of clients’ crypto assets.

Under the Act, investment advisory firms must be “competent” to provide securities services to clients and comply with the securities protections set forth in the Investment Advisers Act of 1940.

Cointelegraph reached out to the SEC for clarification on the matter but did not receive an immediate response.

The latest revelation suggests the SEC is not closing its eyes to traditional investment firms in the digital asset space, Anthony Tu-Sekin, who heads the Seward & Kissel Blockchain and Cryptocurrency Group, said in a note to Reuters:

“This is a clear compliance issue for investment advisors. If you have client assets to protect, you should have one of these qualified custodians.

“I think it’s an easy call for the SEC,” he added.

Related: Senator Warren proposes to reduce Wall Street’s involvement in crypto.

In the year On November 15, 2022, the Wall Street Blockchain Alliance (WSBA) wrote a letter to the SEC to clarify what revisions to the “Custody Rule” will be made regarding digital assets.

A letter by six WSBA members to the SEC seeking regulatory clarity on digital asset protection rules. Source: SEC

Cointelegraph reached out to the WSBA to confirm they have received a response from the SEC.

Meanwhile, the securities regulator has stepped up its crypto enforcement efforts throughout the year. By May 2022, the “Crypto Assets and Cyber ​​Unit” had grown the group to almost 100%.

He’s also busy dealing with the ongoing lawsuit against Ripple Labs, over the FTX collapse and actions related to founder Sam Bankman-Fried, among many others.