Ball's in Their Court: Crypto Custodians Waiting on Regulators to Act

Publicado en by Cointele | Publicado en

Custody for allIt seems that the biggest players in crypto have now turned their attention to the crypto custody sector, as a flurry of deals and partnerships were announced during recent months.

Crypto exchange Bitfinex announced a partnership with London-based digital asset custodian Koine, while the New York-based crypto lending firm Genesis Capital acquired custody startup Volt.

Crypto derivatives platform Bakkt claimed on May 18 that it had onboarded more than 70 crypto custody clients.

While experts believe that crypto regulation is needed, given the uniqueness of crypto assets, many regulators continue to treat coins and tokens almost in a similar fashion to traditional assets.

Current state of crypto custody regulations across different jurisdictionsIn general, present regulations globally treat crypto custodians in a similar manner to traditional asset keepers without taking into account the distinctiveness of crypto.

New YorkThe New York Department of Financial Services, or NYDFS, being one of the most prominent and active financial regulators in the world, was one of the first regulators to make a move to put a leash on crypto trading and payment industry by issuing a Bitlicense.

SwitzerlandThe country's top financial regulator, FINMA, is one of the world's most active regulators in the crypto space.

GermanyGermany egan requiring crypto custodians to obtain a license from Jan. 1, 2020, following the implementation of the 5th Anti-Money Laundering Directive legislation, which mandated EU member countries to subject crypto companies to the same Anti-Money Laundering requirements as traditional financial firms.

JapanAfter finding itself right in the thick of the 2017 crypto fever, Japan swiftly moved to start regulating crypto activities after the threats of money laundering and terrorist financing became apparent.

In 2020, the FSA expanded its crypto regulatory oversight to include crypto custody via an amendment to the country's Payment Services Act, under which it regulates crypto exchanges, requiring custodians to register as cryptocurrency exchanges - even if they don't intermediate the sale and purchase of crypto or buy and sell themselves.

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