Even if a platform for trading digital assets claims to be a qualified custodian, it is not certain that this is the case, declared chapter SEC Gary Gensler.
According to him, in the event of the collapse of a crypto firm, “client funds often become the property of a bankrupt company, putting users in a queue to meet claims as part of a lawsuit.”
“Make no mistake: based on how digital asset trading and lending platforms typically operate, investment advisors today cannot rely on them as qualified custodians,” Gensler said.
The comment was made in the context of the agency’s proposal to extend the asset holding rule established in 2009 to cryptocurrencies.
The SEC’s initiative may have been in response to a recent wave of industry bankruptcies, which has seen FTX, Celsius, BlockFi, and Voyager clients unable to recover their funds in full. Current SEC guidelines oblige firms to create conditions to maximize payments to creditors.
Tightening the rules may involve ending the holding of funds and transferring them to banks or other traditional financial companies.
To qualify as a qualified custodian, a firm will need to ensure proper segregation of all assets, undergo annual audits by government accountants, and take other steps to create transparency.
Earlier, Gensler urged industry representatives to pay attention to the Kraken story.
The SEC was interested in the staking program, the offer and sale of which the platform “did not register.” According to the agency, the exchange did not admit or deny the allegations, but agreed to stop providing services to US users and pay $30 million in fines.
Recall that in February, Gensler allowed the recognition of any cryptocurrencies, with the exception of bitcoin, securities.
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