SEC probes investment advisers on crypto: Sources

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(Reuters) The USSecurities and Exchange Commission is questioning registered investment advisers about their compliance with rules regarding the safekeeping of clients’ crypto assets, three sources with knowledge of the investigation told Reuters.

The SEC has been questioning advisers’ efforts to follow agency rules regarding custody of clients’ digital assets for several months, but investigation has accelerated following the crypto exchange’s explosion FTX, the sources said. They spoke on condition of anonymity because the investigations are not public.

Advisors who manage clients’ digital assets typically use a third party to store them.

SECenforcement staff are asking investment advisers for details on what companies have done to assess custody of platforms, including FTX, one of the sources said. The app’s wide sweep, which has not previously been reported, is a sign that the scrutiny of the crypto industry by the top regulator of US markets is extending to more traditional businesses on Wall Street.

An SEC spokesperson declined to comment.

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