The SEC should extend customer protection to crypto, says Stifel’s CEO
Ron Kruszewski has urged the United States Securities and Exchange Commission (SEC) to extend customer protection to crypto.
Ron Kruszewski, the CEO of Stifel Financial, has called on the US SEC to extend its customer protection to crypto. His comment comes in light of FTX’s recent collapse.
During a recent interview with CNBC, the Stifel boss said the SEC is needed to avoid another FTX. he said;
“There’s a fire going in confidence in crypto. We shouldn’t be deciding which fire department needs to go. Let’s get on this, get the Customer Protection Rule in place. What makes the U.S. markets as strong as they are is that no matter what it is, if you take customer funds, you cannot use those customer funds in your business. That rule has been on the books for 50 years. Why it does not apply to crypto is something that we need to fix.”
The Customer Protection Rule (Rule 15c3-3), has been around since the 1970s. According to the rule, broker-dealers in the United States are required to segregate customer securities and cash from the firm’s own funds that it uses to conduct trades and other transactions. The rule is designed to protect customer assets in case the firm collapses.
Traditional brokerage platforms, such as eToro, follow such rules and ensure that user funds are kept in different bank accounts. Thus, ensuring the safety of customer assets in case something happens to the firm.
FTX, one of the leading crypto exchanges in the world, collapsed two weeks ago. The collapse has affected numerous crypto companies affiliated with FTX.
Voyager Digital is one of the crypto companies that has been suffering since the start of the bear market. The crypto lender had previously agreed on an acquisition deal with FTX. However, with FTX currently bankrupt, Binance US, the United States arm of the Binance exchange, is preparing another bid to acquire Voyager Digital.