Tyler Winklevoss, the man behind the Gemini cryptocurrency exchange, asserts that the U.S. SEC has acknowledged their crypto custody as a competent custodian.
The U.S. banking watchdog's decision puts cryptocurrency exchanges' custody policies at risk, even if other federal regulators are trying to stop banks from storing consumer bitcoins.
Tyler Winklevoss, claims that the U.S. SEC has recognised their crypto custody as a qualified custodian.
The Securities and Exchange Commission (SEC) decided to recommend significant changes to federal regulations on a 4-1 vote on Wednesday. With these amendments, custody regulations would be expanded to cover assets like cryptocurrencies and businesses would have to register in order to store customer assets. Once the SEC voted 4-1 to propose significant changes to federal regulations, the vote was held.
While other federal regulators are actively attempting to prevent custodians like banks from preserving customer bitcoin holdings, the current action by the U.S. financial watchdog introduces a new risk to the custody policy of cryptocurrency exchanges. The Gemini Trust, however, has been acknowledged by the SEC as a qualified custodian for cryptocurrencies, according to Tyler Winklevoss, the creator of the Gemini cryptocurrency exchange.
A New York trust company known as Gemini Trust Company LLC has been accredited by the New York Banking Law as a competent custodian and as a fiduciary since 2015. Tyler asserts that this will hold true regardless of the new regulation the SEC chooses to approve and implement.
Due to the fact that crypto custody creates a variety of challenges that are not present in traditional asset management, Gemini Trust claims that it uses technology that is specifically concerned with digital assets. Tyler was cited as expressing the following in relation to Gemini's correctional services:
Because of this, we created a best-in-class custody strategy, which was designed entirely under the close supervision and scrutiny of the NYDFS.
Traditionally, banking organisations, trust corporations, and securities broker-dealers are examples of businesses that can serve as competent custodians. Despite this, companies like Coinbase Crypto Exchange have started to offer the service during the past few years. This is because safeguarding against the theft or hacking of assets like bitcoin is complicated.
Tyler further adds that Gemini Trust is bound by capital, BSA/AML, and cybersecurity rules, and that it has earned SOC 1 Type II and SOC 2 Type II certifications for its custody offering. Also, according to sources, Gemini Trust Company is regularly audited in a way akin to a bank. When considered as a whole, these compliance criteria act as an independent confirmation that Gemini Trust Company's operations and security procedures adhere to the highest standards.
