New proposal by the SEC may make it harder for hedge funds to access crypto firms.
Key Points: The SEC would make it harder for cryptocurrency companies to qualify as “qualified custodians,” which are businesses that hold client funds for money managers.
The SEC plan may make it more difficult for private equity firms and pension funds to deal with many crypto startups.
Hedge funds, along with some venture capital and pension funds are required to maintain the assets of their customers with certified custodians.
Bloomberg reported Tuesday that the U.S. Securities and Exchange Commission will propose regulatory changes that would make it more difficult to partner with crypto companies by making it harder for them to be “qualified custodians,” which allows them to keep client assets for money managers. It is unclear what specific modification the agency might want to make to these rules. Hedge funds, venture capital firms and pension funds are required by law to keep client assets safe with certified custodians. The regulation could force institutions that have made investments in cryptocurrency to move their clients’ assets if it is adopted. They could also face unexpected audits related to their custody arrangements and other repercussions. After a series of shocking failures in 2022, including those by Voyager Digital, a cryptocurrency broker, and FTX, the US regulators have taken a more assertive approach to cryptocurrencies. Recently, the SEC sued Paxos, a stablecoin producer, and its BUSD stablecoin. The collapse of the cryptomarketrecently, which infuriated international authorities, has left the sector in a state of shock.DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your research before investing.Join us to keep track of news: https://linktr.ee/coincuHaroldCoincu NewsTags: BUSDcryptoFTXPaxosSECVoyager Digital