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Sandeep Kumar Mishra
Jan 27, 2023
by Sandeep Kumar Mishra

Report Says Wall Street Advisors Probed by SEC Over Crypto Custody

SEC Wall Street

Table of contents

  1. SEC Trying to Ascertain Whether Or Not Wall Street Advisors Adhered to the Guidelines
  2. SEC Beefing Up Its Crypto Enforcement Efforts
The U.S. SEC has been probing traditional Wall Street investment advisors that may be offering digital asset custody to its clients without the proper qualifications. According to a Reuters report that cited three sources with knowledge of the inquiry, 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.

SEC Trying to Ascertain Whether Or Not Wall Street Advisors Adhered to the Guidelines

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.

Anthony Tu-Sekine, who leads Seward and Kissel's Blockchain and Cryptocurrency Group, said that the recent revelation suggests the SEC hasn’t turned a blind eye to traditional investment firms in the digital asset space.

SEC Beefing Up Its Crypto Enforcement Efforts

On Nov. 15, the Wall Street Blockchain Alliance (WSBA) wrote a letter to the SEC to seek clarity on what potential amendments, if any, apply to the “Custody Rule” as it pertains to digital assets. Meanwhile, the securities regulator has continued to beef up its crypto enforcement efforts over the year. In May 2022, it increased its “Crypto Assets and Cyber Unit” team by nearly 100%.

It’s also kept busy dealing with the ongoing lawsuit against Ripple Labs, actions relating to FTX’s collapse, and its founder Sam Bankman-Fried, among many more.

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Report Says Wall Street Advisors Probed by SEC Over Crypto Custody
Sandeep Kumar Mishra
Sandeep is an avid cryptocurrency enthusiast and a keen & passionate blogger. He has a strong mix of skills in the areas of computer networking, cryptography, algorithms, and data structures and specializes in ERC20 tokens. Lately, he is taking a lot of interest in blockchain-powered AI solutions, about which he is also reading and writing extensively. He has to his name dozens of deeply researched articles about cryptocurrencies, blockchain, AI, and IoT. Apart from that, he loves to keep track of the latest trends in social media and digital marketing space. Also, as a huge proponent of blockchain and cryptocurrencies, Sandeep tries to deliver all the latest cryptocurrency news to ardent crypto supporters like yourselves. If you like his content, feel free to follow him on LinkedIn.

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