The post XRP Lawyer Exposes SEC’s Crypto Custodian Shake Up – Reveals Shocking Hidden Agenda! appeared first on Coinpedia Fintech News
On February 15, the United States Securities and Exchange Commission announced proposed rule changes to enhance protections of customer assets managed by registered investment advisers. According to the proposed rules, investment advisers are expected not to inappropriately use, lose, or abuse investors’ assets.
The SEC responded to the FTX and Alameda collapse that lost over $8 billion of investors’ capital. According to the SEC, the rule change is to ensure client assets are appropriately segregated and held in accounts to protect the assets in the event of a qualified custodian bankruptcy.
As a result, the SEC wants to have surprise audits on investment advisors by independent public accountants to verify client assets.
Effect of SEC Proposed Crypto Custody Rules
With the new proposed rules, market analysts have indicated that the SEC intends to help big players get a significant industry share. Moreover, the Biden administration signed a crypto executive order last year to ensure United States fintech companies have a competitive edge in the global markets.
Already licensed custodians in the United States, including Coinbase and Gemini, are expected to benefit from the rule change. Traditional banks are expected to catch up as they contend to get crypto custodian licenses.
The proposed SEC custodian rule change will severely affect crypto exchanges without a banking license. This is evident with the hit on Kraken for issuing unregistered securities through its staking program.
The change is, however, not welcomed by all who think it is terrible for small players in the market.
“If the SEC changed the rules so only qualified custodians can hold crypto for others, then it sets up a new gatekeeping system where the only custody solution is regulated banks,” said Maya Zehavi, a cryptocurrency angel investor.
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