U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler has pushed back against the notion that cryptocurrency exchanges can be safe and qualified custodians for investment advisors. Speaking at an investor advisory committee meeting on Thursday, it said a recently proposed rule directing investment advisers to find qualified custodians to store assets — including cryptocurrencies — represents a “significant improvement” to existing protection rules. ".

He also said that under these guidelines, cryptocurrency exchanges should not be considered safe. “To be clear: just because a cryptocurrency trading platform claims to be a qualified custodian does not mean it is.” Gensler pointed to the recent bankruptcy of the crypto industry, noting that the assets held by customers on these platforms are now Part of the bankruptcy estate rather than returning directly to the client.