US SEC Investigating Wall Street Over Crypto Custody: Report
The investigation was launched as Wall Street investment advisors offered digital assets to their clients without the required licenses.
Reports reveal that the SEC's investigations were previously unknown as the agency's inquiries are not made public.
The SEC has maintained and strengthened its efforts to enforce cryptocurrency legislation over the course of the year.
As per recent reports, the US Securities and Exchange Commission
(SEC) is carrying out a probe into Wall Street investment advisors. The investigation was launched as investment advisors offered digital assets to their clients without the required licenses.
A Reuters report published on January 26 reveals that the investigations have been ongoing. However, following the FTX debacle, the investigation garnered greater attention. The anonymous sources interviewed revealed that the SEC's probes were kept secret.
Currently, the SEC is looking for information on firms' steps in acquiring crypto platforms. The massive enforcement sweep implies that the SEC's examination of the crypto industry is broadening.
By law, firms are only allowed to keep their clients' crypto assets or securities if they follow certain standards. Keeping assets with a custodian firm is one of them. Despite the fact that the SEC does not maintain a list of such firms, the custodian should be qualified. Furthermore, the SEC does not approve firms to act as custodians.
Crypto Regulatory Enforcement
Under the current administration, the SEC continues to prioritize cryptocurrency enforcement. The regulator, on the other hand, is under renewed pressure to crack down on bad actors in the cryptocurrency market.
The current investigation follows a string of bankruptcies in the crypto industry. This includes filing criminal charges against FTX's founder and former CEO, Sam Bankman-Fried, for alleged fraud.
Furthermore, the regulator is interviewing FTX stockholders about the details of their due diligence methods before investing in the crypto exchange.
Also read: What made the Early Bitcoin Investor Davinci Jeremie say ‘Buy Shiba Inu’?
