- Gemini Trust clears the SOC 2 examination for Service Organization Type 1 by engaging and appointing Big Four Deloitte to do the evaluation.
- The announcement comes one month before the deadline set by the SEC to review the ETF proposals
Billionaire Bitcoin investors Tyler and Cameron Winklevoss‘s Newyork based trust reached a new milestone. They have successfully cleared the criteria that fall under SOC 2 review for Service Organization Type 1 as per the American Institute of Certified Public Accountants (AICPA) guidelines. Big 4 auditor Deloitte & Touche LLP (Deloitte) performed an independent evaluation of the security controls maintained at the trust.
Gemini is also the first exchange in the world to adhere to Level 2 standards of SOC under the regulation of the New York Department of Financial Services (NYDFS). These controls have been independently inspected to meet the criteria for Service Organization Type 1 set by the American Institute of Certified Public Accountants (AICPA). The goal of the SOC 2 criteria is to make sure that systems are secure and upholds the ethical spirit of availability, processing integrity, confidentiality, and privacy of customer data.
Security Issue and Custody Compliances
Cryptocurrency exchange wallets are vulnerable to cyber attacks, the Mt. Gox incident in 2011 Japan which was the first large-scale Bitcoin theft from a custodian. Cryptocurrency promotes an economy that is not supported by the banks. However, most of the cryptocurrency wallet users still have no or only partial control of their private addresses.
Paper and hardware wallets are a solution for secured independent cold storage of Bitcoins; however, for significant investments and ‘whale’ sized wallets, they too are not entirely efficacious. Institutional Financial trust companies adhere to state and global custody criteria and only after assurance of complete security and privacy, the high-volume investors chose a specific trust.
Currently, there are no guidelines underlined by the SEC or the CFTC related to cryptocurrencies. The nature of Bitcoin is also ambiguous and oscillates between currency and commodity. Hence, the regulators, company owners, and users are looking for security and protection against malpractices to maintain an ethical and informed use of Bitcoin.
With Cboe withdrawing its ETF proposal, the prospects for a derivative fund on US commodities market looked bleak. Nevertheless, progress made by Gemini Trust towards security compliances and regulatory approval comes as a silver lining for investors and other seven Bitcoin ETF proposals pending with the SEC.