Under SIPA, the definition of “customer” primarily encompasses two types of creditors: (i) any person who has a claim on account of securities received, acquired, or held by the debtor in the ordinary course of its business as a broker or dealer from or for the securities accounts of such person for certain specified purposes, and (ii) any person who has deposited cash with the debtor for the purpose of purchasing securities. See 15 U.S.C. § 78lll. The court acknowledged that in applying the definition of “customer” under SIPA, a particular creditor of an insolvent broker-dealer might qualify as a “customer” with respect to some of its claims but not with respect to others.

nesses. FINRA will continue to inquire into Crypto Assets as the assets continue to evolve and new products become available. Employing diligence, knowledgeable persons and – frankly – caution will be essential in managing the associated business and regulatory risks.https://www.finra.org/rules-guidance/guidance/targeted-examination-letters/sweep-update-jan2024 FINRA defines “Crypto Assets” as an asset issued or transferred “using distributed ledger or blockchain technology, including, but not limited to, so-called ‘virtual currencies,’ ‘coins,’ and ‘tokens.’” https://www.finra.org/rules-guidance/guidance/targeted-examination-letters/crypto-asset-communications “Auction-Rate Securities: Short-Term or Long?,” Stephen Taub, CFO.com, March 25, 2005. Testimony Concerning The SEC’s Recent Actions With Respect to Auction Rate Securities, Before the Committee on Financial Services, U.S. House of Representatives, by Linda Chatman Thomsen, Director, Division of Enforcement (September 18, 2008) 15 U.S.C. 78lll(14)(Definition of “security” under SIPA limits investment contracts included to “any investment contract or certificate of interest or participation in any profit-sharing agreement or in any oil, gas, or mineral royalty or lease (if such investment contract or interest is the subject of a registration statement with theCommissionpursuant to the provisions of theSecurities Act of 1933…”)

[2] See 17 CFR § 240.17a-4;17 CFR § 240.17a-5.[3] See 15 U.S.C. § 78lll.[4] See 7 U.S.C. § 6d.

[3] 15 U.S.C. § 78aaa-78lll.[4] See 15 U.S.C. § 78lll(14).[View source.]

This is because the law does not cover investment contracts or interests that are not the subject of a registration statement. (Click here to access 15 U.S.C. § 78lll)(14).)Staff indicated, however, that many of its concerns regarding application of the Customer Protection Rule may not apply where a broker-dealer solely engages in “non-custodial activities” for digital asset securities such as facilitating the bilateral settlement of a transaction directly between a buyer and an issuer without interposing itself, or where a broker-dealer facilitates a peer-to-peer over-the-counter transaction between a buyer and seller with no digital security passing through the broker-dealer.

See 15 U.S.C. § 78fff.See 15 U.S.C. § 78lll(14).