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Written by 7:38 pm Blog, Securities Fraud Articles

SEC Investigating RIAs over Crypto-Asset Custody 

SEC Investigates RIAs over Crypto-Asset Custody, featured by top securities fraud attorneys, the White Law group

The SEC is Reportedly Investigating Registered Investment Advisors (RIAs) re Rules for Crypto-assset Custody 

The Securities and Exchange Commission (SEC) is reportedly examining the activities of registered investment advisers over whether they’re following applicable guidelines around the custody of customer digital assets, according to an article by Reuters.  

The agency has reportedly been questioning advisers’ ongoing efforts to adhere to the applicable rules regarding custody of customers’ crypto-assets bust has intensified following the collapse of the digital currency exchange FTX, according to the article. 

The SEC’s enforcement staff is reportedly asking investment advisors to provide details about what the companies have done to assess custody for service providers like FTX. 

According to the article, the enforcement effort, which has just come to light, serves as an indication that US regulators are increasing their oversight and scrutiny of the cryptocurrency sector. 

Investment advisors are required to follow specific guidelines in regards to custody of customer funds or securities to safeguard the assets. By law, advisors must hold these assets through a company that operates as a “qualified custodian.” But the SEC apparently doesn’t maintain a specific list to provide licenses to companies to serve as a “qulalified custodian”. 

According to the article, the SEC’s investigation suggests that the agency is focused on a long-standing issue for traditional companies that have looked into ways to invest in cryptocurrency assets. 

The SEC’s accounting guidance has made it very expensive for many lending service providers to manage crypto-assets on behalf of customers, which limits options for advisors looking for reliable custodians. 

The SEC is reportedly under pressure to investigate more crypto firms after several major bankruptcies across the sector as well as the announcement of charges against FTX’s founder and ex-CEO, for allegedly engaging in massive fraud. 

The agency is also reportedly investigating the operations of FTX equity investors for more clarity regarding their due diligence efforts when they decided to invest in the crypto-asset exchange. 

Free Consultation with an Investment Fraud Attorney 

This information is all publicly available and provided to you by the White Law Group. For a free consultation with a securities attorney, please call the White Law Group at (888) 637-5510.  

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington. For more information, please visit our website, whitesecuritieslaw.com.              


Tags: , , , , , , , , Last modified: January 27, 2023