The CEO of the company claimed that they have developed the best-in-class custody approach. Tyler Winklevoss detailed the requirements that Gemini meets in a Twitter thread.
From Gemini’s management there were signs of approval about the possible advancement of modifications on the custody of assets. This is a series of aspects being analyzed by the US Securities and Exchange Commission (SEC).
According to the agency, today trading and loan platforms do not exercise qualified custody of their users’ money. That is what it seeks to modify, and therefore, the discussion kicked off with a favorable vote of 4 to 1.
Gemini CEO Tyler Winklevoss posted a thread on Twitter where he refers to these points under consideration.
“We are pleased to see that the SEC’s proposed rulemaking on custody recognizes Gemini as a qualified custodian.”
SEC Chairman Gary Gensler asserted that the proposal under discussion would cover all classes of assets that an adviser can hold, such as private securities, real estate and derivatives. The Winklevoss thread takes the opportunity to ponder the process used by the platform he runs.
“We recognize that the technology involved with digital assets presents unique considerations when it comes to custody. That’s why we developed a best-in-class custody approach, all of which has been crafted under the direct supervision and review of the NYDFS. Gemini Trust Co. undergoes regular bank-like examinations, is subject to capital, BSA/AML, and cybersecurity requirements, and has achieved SOC 1 Type II and SOC 2 Type II certifications for its custody product.”
New Standard Requirements
The changes being pondered by the SEC would include assets that are currently covered as funds and securities, as well as those that are not funds or securities. The proposed rule would also require advisers to segregate the assets of their investors.
One of Gary Gensler’s arguments is that, with a flurry of changes in the ecosystem, the rule has not been updated since 2009. Therefore, it is imperative to update the rule to reality and cover all current instruments.
Said proposal would increase the safeguarding requirement for all assets and would also add more protections to assets held by the “qualified custodian,” including surprise examinations. Under current SEC regulations, an appropriate custodian would be a chartered bank or trust company, or a stockbroker approved by regulators.
Winklevoss puts Gemini in the starting line as a company that would comply with everything demanded by the new rule:
“Together, these compliance standards serve as independent verification that Gemini Trust Co.’s operations and security protocols meet the strongest standards. Investor protection is paramount to the continued growth of crypto markets. We welcome this public rulemaking and Gemini will share additional thoughts during this process. This is a good step forward, although more clarity and guidance from regulators is needed to help our industry emerge from the crypto winter stronger than ever.”
By Audy Castaneda
