On Wednesday, the Securities and Exchange Commission (SEC) voted 4-1 to propose sweeping changes to federal regulations. These changes would expand custody rules to include assets such as cryptocurrency and require companies to gain or maintain registration in order to hold these customer assets. The vote came after the SEC voted 4-1 to propose sweeping changes to federal regulations.
Gemini Trust Gets Green Signal
This recent action by the U.S. financial watchdog creates a new risk to the custody policy of cryptocurrency exchanges because other federal regulators are aggressively working to restrict custodians like banks from maintaining customer cryptocurrency holdings. However, according to Tyler Winklevoss, the founder of Gemini crypto exchange, the SEC has recognized the Gemini Trust as a qualified custodian for cryptocurrencies.
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Gemini Trust Company LLC, a New York trust firm that, since 2015, has been recognized as both a fiduciary and a competent custodian in accordance with the New York Banking Law. According to Tyler, this will remain the case regardless of which new rule the SEC decides to adopt and put into force.
1/ We are pleased to see that the @SECGov‘s proposed rulemaking on custody recognizes that @GeminiTrustCo is a qualified custodian.
— Tyler Winklevoss (@tyler) February 17, 2023
Gemini’s Big Regulatory Win?
Gemini Trust asserts that it utilizes technology that is particularly concerned with digital assets due to the fact that crypto custody raises a number of issues that are not present in traditional asset management. While talking about Gemini’s custodial services, Tyler was quoted as saying:
This is why we developed a best-in-class approach to custody, all of which has been crafted under the direct supervision and examination of the NYDFS.
Traditional examples of firms that can function as qualified custodians include banking institutions, trust corporations, and securities broker-dealers. In spite of this, over the course of the past few years, businesses such as Coinbase crypto exchange have begun to offer the service. This is due to the intricacies involved in preventing assets such as bitcoin from being stolen or hacked.
Furthermore, Tyler states that Gemini Trust has attained SOC 1 Type II and SOC 2 Type II certifications for its custody product, and it is subject to capital, BSA/AML, and cybersecurity regulations. Also, as per reports, Gemini Trust Company is examined on a regular basis in a manner similar to that of a bank. These compliance requirements, when taken as a whole, serve as an independent verification that the operations and security processes utilized by Gemini Trust Company are up to the most stringent standards.
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Source: https://coingape.com/sec-approves-this-u-s-exchanges-custody-service-while-coinbases-remain-uncertain/