Coinbase Factors Out Misguided Guidelines by the SEC on RIA’s Requirement

• Coinbase factors out the misguided guidelines by the SEC that require holding consumer belongings at certified custodians (QCs).
• The CLO of Coinbase, Paul Grewal, identified that the proposal singles out crypto.
• Coinbase talked about a number of solutions within the QC proposal remark letter.

Coinbase has not too long ago filed a professional custodian (QC) proposal remark letter to the US Securities and Trade Fee. The remark is in response to the fee’s February 15 proposal, which is targeted on updating the funding adviser custody rule. Coinbase chief authorized officer Paul Grewal additionally not too long ago put out a tweet to emphasize the identical topic.

Grewal highlighted the SEC’s current proposal, which urged revisions to a rule requiring registered funding advisors (RIAs) to carry consumer belongings at certified custodians (QCs). Grewal talked about that the complete certified custodian (QC) proposal remark letter is misguided and urged methods to enhance it.

The Coinbase CLO additionally talked concerning the different chance in case the SEC’s proposal is adopted, stating that Coinbase is assured that the Coinbase Custody Belief Firm will stay a QC and already agrees with the spirit of the proposal.

Like different current SEC actions, this proposal unnecessarily singles out crypto and makes inappropriate assumptions about custodial practices based mostly on securities markets.

Grewal summarized a number of highlights from Coinbase’s proposal to the SEC, with the primary one specializing in defining state belief corporations and different state-regulated monetary establishments as QCs. Secondly, Grewal highlighted that the SEC’s proposal may ban RIAs from buying and selling on non-QC crypto exchanges. This, in line with him, wouldn’t profit RIAs or their shoppers.

Moreover, Coinbase’s proposal contains solutions on learn how to keep away from disrupting and dealing industrial realities between custodians and their shoppers. Grewal additionally confirmed his appreciation for having the prospect to weigh in.