{"id":74958,"date":"2023-03-03T11:47:22","date_gmt":"2023-03-03T09:47:22","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=74958"},"modified":"2025-09-10T02:41:02","modified_gmt":"2025-09-09T23:41:02","slug":"sec-chief-warns-crypto-exchanges-that-custodial-status-may-be-misaligned","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/sec-chief-warns-crypto-exchanges-that-custodial-status-may-be-misaligned\/","title":{"rendered":"SEC chief warns crypto exchanges that custodial status may be misaligned"},"content":{"rendered":"<p>Even if a platform trading digital assets claims to be a qualified custodian, that&#8217;s not necessarily the case, <a href=\"https:\/\/www.sec.gov\/news\/speech\/gensler-remarks-iac-030223\">said<\/a> Gary Gensler, head of the <span data-descr=\"U.S. Securities and Exchange Commission\" class=\"old_tooltip\">SEC<\/span>.<\/p>\n<p>He said that in the event of a crypto firm&#8217;s collapse, customer funds often become the property of the bankrupt company, leaving users in line to have their claims satisfied in court.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>Do not be mistaken: given how digital-asset trading and lending platforms typically operate, investment advisers today cannot rely on them as qualified custodians,<\/p>\n<p>\u2014 Gensler stressed.<\/p><\/blockquote>\n<p>The remark came in the context of <a href=\"https:\/\/u1f987.com\/en\/news\/gensler-flags-breaches-by-custody-providers\">proposals<\/a> by the agency to extend the 2009 rule on custody of cryptocurrency assets.<\/p>\n<p>The agency&#8217;s initiative could be a response to a recent wave of bankruptcies in the industry, leaving customers <a href=\"https:\/\/u1f987.com\/en\/news\/ftx-group-files-for-bankruptcy-sam-bankman-fried-resigns-as-ceo\">FTX<\/a>, <a href=\"https:\/\/u1f987.com\/en\/news\/celsius-files-for-bankruptcy-protection\">Celsius<\/a>, <a href=\"https:\/\/u1f987.com\/en\/news\/blockfi-files-for-chapter-11-bankruptcy-protection\">BlockFi<\/a> and <a href=\"https:\/\/u1f987.com\/en\/news\/voyager-digital-files-for-chapter-11-bankruptcy\">Voyager<\/a> potentially unable to recover all of their funds. The SEC&#8217;s current guidance obliges firms to create conditions to maximise creditor payouts.<\/p>\n<p>The tightening of the rules could entail not holding customer funds and transferring them to banks or other traditional financial institutions.<\/p>\n<p>To qualify for the status of a qualified custodian, a firm would need to ensure proper separation of all assets, undergo annual audits by government accountants and take other steps to enhance transparency.<\/p>\n<p>Earlier, Gensler <a href=\"https:\/\/u1f987.com\/en\/news\/sec-chair-urges-crypto-industry-to-take-note-of-kraken-case\">urged<\/a> industry participants to take note of the Kraken episode.<\/p>\n<p>The SEC&#8217;s interest was sparked by a staking program whose offering and sale the platform did not register. According to the agency, <a href=\"https:\/\/u1f987.com\/en\/news\/kraken-to-pay-30-million-to-settle-sec-charges\">the exchange did not admit or deny the allegations<\/a>, but agreed to halt services to U.S. customers and pay $30 million in penalties.<\/p>\n<p>In February, Gensler <a href=\"https:\/\/u1f987.com\/en\/news\/gary-gensler-hints-that-cryptocurrencies-should-be-treated-as-securities\">indicated<\/a> that any cryptocurrency, other than Bitcoin, could be considered securities.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Even if a digital-asset trading platform claims to be a qualified custodian, that&#8217;s not necessarily the case, said Gary Gensler, the head of the U.S. Securities and Exchange Commission.<\/p>\n","protected":false},"author":1,"featured_media":74959,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1166,36,128],"class_list":["post-74958","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-centralized-exchanges-cex","tag-regulation","tag-sec"],"aioseo_notices":[],"amp_enabled":true,"views":"50","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/74958","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=74958"}],"version-history":[{"count":1,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/74958\/revisions"}],"predecessor-version":[{"id":74960,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/74958\/revisions\/74960"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/74959"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=74958"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=74958"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=74958"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}