Reportedly the US SEC agency is strictly investigating the Crypto custody services offered by Wall Street Blockchain Alliance.
On 26 Jan 2023, Reuters reported that the United States Securities and Exchange Commission (SEC) increased its efforts to investigate the Crypto custody services of Wall Street. This information was provided by Reuters on behalf of three sources.
The report confirmed that the investigation was reportedly going on for several months but after the downfall of the FTX exchange, the SEC increased its investigation efforts against Wall Street to prohibit any kind of another big downfall.
According to this report, the SEC agency is trying to figure out whether Wall Street’s registered investment advisors have met the rules and regulations around the custody of customer digital assets.
As per laws, all the companies providing investment or investment custody services should be qualified under the Investment Advisers Act of 1940.
Earlier this, in mid of Nov 2022, Wall Street wrote a letter to the SEC agency to get clarity on the laws or amendments, which are required to provide crypto custody as a qualified entity.
Since May 2022, The US SEC agency is taking action against Crypto companies more effectively because of the increment of members by 100% in its “Crypto Assets and Cyber Unit”.
Last year, the SEC official talked about the agency’s enforcement action approach and confirmed that they are taking the XRP lawsuit as a priority case.
In Dec 2020, The Securities regulatory body initiated a lawsuit against Ripple, a San Francisco-based Fintech company. Through the lawsuit, the SEC agency claimed that Ripple’ native token XRP was unregistered security and also the company’ top executives violated securities law by selling $1.3 worth of XRP unregistered securities publicly.