Gary Gensler, the chairman of the Securities and Exchange Commission has unleashed another bombshell on crypto firms, are crypto firms in trouble?
While speaking at the Investor Advisory Committee meeting, Gary Gensler, the SEC chair announced a proposal that would direct investment advisers to find qualified custodians for keeping their assets safe, including digital assets. In the meeting, he said crypto exchanges should not be considered among the securities in the proposal he announced.
The SEC chair had once made a similar comment earlier about crypto exchanges being a security, the first time he showed skepticism towards crypto exchanges was when the regulators sanctioned Kraken crypto exchange regarding its staking services.
According to Gensler, assets held in insolvent crypto platforms are now a part of the estate instead of being returned to investors.
“To be clear, just because a crypto trading platform claims to be a qualified custodian doesn’t mean that it is,” Gensler noted, while addressing a subject related to qualified custodians in the cryptocurrency market.
Gensler furthered that based on how crypto trading platforms and lenders operate generally, “investment advisers cannot rely on them today as qualified custodians”.
The US SEC since stepping in this year has up its regulatory scrutiny against crypto firms, Kraken, Paxos, and many more crypto firms have been a victim of SEC intense regulations.
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