The United States Securities and Exchange Commission began an investigation into Wall Street traditional financial advisers in order to determine whether they granted digital assets custody to their customers without the required qualifications. This investigation will determine whether these advisors have the right to grant custody to digital assets to customers.
According to Reuters, a January 26th article cited “three sources who have knowledge of the matter”. Although the SEC’s investigation has been ongoing for a few month, it seems to have gained speed since the collapse in the cryptocurrency exchange FTX.
Sources say that the Securities and Exchange Commission, (SEC), has never made public any inquiries at this time since the investigations that it’s currently conducting are confidential.
According to Reuters, most of the SEC’s work in this investigation is focused upon determining whether registered advisors have complied or not with regulations regarding custody of client crypto holdings. This is the focus of the SEC’s investigation into whether registered advisors have complied the laws and regulations regarding custody of client cryptocurrency holdings. To determine if registered investment advisors have followed the rules and regulations governing the custody of client Bitcoin assets, the SEC is currently investigating. This is the main focus of the investigation.
Investment advisory firms must be qualified under the law to maintain their compliance with the custodial protections set forth in the Investment Advisers Act of 40 and be able provide custody services to clients. This qualification is required in order to provide custody services. This regulation was created to ensure that investors who are investment adviser businesses have access safe and secure custody services.