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SEC Approves This U.S. Exchange’s Custody Service While Coinbase’s Remain Uncertain

Tyler Winklevoss, founder of Gemini crypto exchange claims their crypto custody has been accredited as a qualified custodian by the U.S. SEC.
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SEC Approves This U.S. Exchange’s Custody Service While Coinbase’s Remain Uncertain

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.

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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.

Read More: Check Out The Top 10 DeFi Lending Platforms Of 2023

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.

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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.

Also Read: New AI Chatbot Emerges As Potential Rival, Sparks Debate Over ChatGPT’s Future

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Pratik Bhuyan

Pratik has been a crypto evangelist since 2016 & been through almost all that crypto has to offer. Be it the ICO boom, bear markets of 2018, Bitcoin halving to till now - he has seen it all.

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Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
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