SEC Settles Charges with Galois Capital Management Over Custody Rule Violations
The post SEC Settles Charges with Galois Capital Management Over Custody Rule Violations appeared on BitcoinEthereumNews.com.
The U.S. Securities and Exchange Commission (SEC) has settled an enforcement action against Galois Capital Management, a cryptocurrency investment firm. This settlement highlights ongoing challenges involving regulatory compliance within the rapidly evolving crypto landscape. Galois Capital has agreed to a $255,000 payment while maintaining its stance on the safety of its custodian practices. This article explores the recent SEC settlement with Galois Capital Management, shedding light on regulatory challenges in the crypto investment sector and the implications for custodial practices. SEC Enforcement Action Revealed The SEC has reached a settlement with Galois Capital Management, a crypto-centric investment advisory firm based in Florida, concerning allegations related to custody rule violations. The commission raised concerns regarding the firm’s choice of Fireblocks, a non-qualified custodian, as well as issues related to a potentially misleading redemption policy. By settling, Galois has agreed to pay a fine of $255,000, although it does not admit to any wrongdoing. Concerns Around Custody Practices The decision to utilize Fireblocks has been a point of contention. Galois Capital defended its choice by stating that at the time, they considered Fireblocks the most suitable and secure option for safeguarding digital assets. This assertion indicates a broader discussion surrounding custodial solutions in the cryptocurrency sector, and how firms navigate the nuances of regulatory compliance. This enforcement by the SEC emphasizes the critical importance of ensuring that custodial choices align with established regulations, as well as the potential repercussions of lapses in compliance, as highlighted by Adam Cochran, a well-known cryptocurrency analyst. Reactions from the Crypto Community The broader crypto community has reacted strongly to the SEC’s actions, with many voices raising concerns about the agency’s motives. Legal expert Max Schatzow described the recent enforcement as potentially vindictive, suggesting that Galois Capital may have become a target for regulatory scrutiny due to…
Filed under: News - @ September 3, 2024 9:20 pm