Share this article
Sign Up
- Back to menuPrices
- Back to menuResearch
- Back to menu
- Back to menu
- Back to menu
- Back to menu
- Back to menuWebinars
SEC Chair Gensler Says Crypto Exchanges May Not Be 'Qualified Custodians'
"Just because a crypto trading platform claims to be a qualified custodian doesn’t mean that it is," the SEC chair said.
U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler pushed back on the idea that crypto exchanges could be safe qualified custodians for investment advisers.
Speaking at an Investor Advisory Committee meeting Thursday, Gensler said a recently proposed rule directing investment advisers to look to qualified custodians for storage of assets – including cryptocurrencies – makes "important enhancements" to existing protection rules. He also said crypto exchanges should not be considered safe under those guidelines.
STORY CONTINUES BELOW
"Based upon how crypto trading and lending platforms generally operate, investment advisers cannot rely on them today as qualified custodians," Gensler said. "To be clear: Just because a crypto trading platform claims to be a qualified custodian doesn’t mean that it is."
The SEC chair pointed to recent bankruptcies in the crypto sector, noting that customers' property held on those platforms are now part of the bankruptcy estate, rather than returning directly to the customers.
"The proposal takes up Congress’s 2010 provision for us to expand the custody rule to cover all of an investor’s assets, not just their funds or securities. Congress granted us new authorities to expand the custody rule in response to the financial crisis and Bernie Madoff’s frauds. The expanded custody rule would help ensure that advisers don’t inappropriately use, abuse, or lose investors’ assets," Gensler said in his remarks.
Nikhilesh De
Nikhilesh De is CoinDesk's managing editor for global policy and regulation, covering regulators, lawmakers and institutions. He owns < $50 in BTC and < $20 in ETH. He won a Gerald Loeb award in the beat reporting category as part of CoinDesk's blockbuster FTX coverage in 2023, and was named the Association of Cryptocurrency Journalists and Researchers' Journalist of the Year in 2020.
More For You
Crypto Industry Asks President Trump to Stop JPMorgan’s 'Punitive Tax' on Data Access
A coalition of fintech and crypto trade groups is urging the White House to defend open banking and stop JPMorgan from charging fees to access customer data.
What to know:
- Ten major fintech and crypto trade associations have urged President Trump to stop big banks from imposing fees that could hinder innovation and competition.
- JPMorgan's plan to charge for access to consumer banking data may debank millions and threaten the adoption of stablecoins and self-custody wallets.
- The CFPB's open banking rule, which mandates free consumer access to bank data, is under threat as banks have sued to block it, and the CFPB has requested its vacatur.
