BIG NEWS FROM SEC🚨-clarity in US #crypto regulation did come w/ #Wyoming's Oct 23 #NoActionLetter regarding #qualifiedcustodian (SEC just confirmed)
tl;dr=SEC Custody Rule favors banks as QCs, bc state trust cos may not give as much protection as banks
sec.gov/news/public-st…
tl;dr=SEC Custody Rule favors banks as QCs, bc state trust cos may not give as much protection as banks
sec.gov/news/public-st…
2/ Lack of clarity has kept the HUGE #RIA & asset mgr market out of #crypto but this should help. Sum:
* banks are #qualifiedcustodian by def'n, but
* state-chartered trust cos may not be
RIA must defend that a state trust co provides as much protection as a bank, broker, FCM.
* banks are #qualifiedcustodian by def'n, but
* state-chartered trust cos may not be
RIA must defend that a state trust co provides as much protection as a bank, broker, FCM.
3/ Consider how SEC frames the ?s:
* do state trust cos have "characteristics similar to" institutions "SEC has identified as QCs" (ie, state trust cos aren't in group SEC identifies as QCs)
* wld state trust co as QC add gaps/enhancements? (again the ? presumes they're not QCs)
* do state trust cos have "characteristics similar to" institutions "SEC has identified as QCs" (ie, state trust cos aren't in group SEC identifies as QCs)
* wld state trust co as QC add gaps/enhancements? (again the ? presumes they're not QCs)
4/ This is such a timely announcement from the SEC,coming right in the middle of big #RIA conf by @CoinDesk called "#Bitcoin for Advisors" today. I can only imagine the buzz about this among the audience, @TR401.
5/ Reminder:
i. banks are #qualifiedcustodian by def'n,
ii. banks can access Fed liquidity,
iii. banks are MUCH better capitalized, audited & subject to more frequent supervisory exams, &
iv. banks offer customers clearer asset segregation protection in bankruptcy than trust cos
i. banks are #qualifiedcustodian by def'n,
ii. banks can access Fed liquidity,
iii. banks are MUCH better capitalized, audited & subject to more frequent supervisory exams, &
iv. banks offer customers clearer asset segregation protection in bankruptcy than trust cos
6/ Above reasons are why the big securities custodians are banks, not trust cos. #Crypto custody market was already moving toward banks when OCC letter authorizing ntl banks to custody crypto came out in July + 2 #Wyoming #SPDI banks got charters--this prob accelerates that trend
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