[Analysis] SEC, FINRA issue explanation of crypto custodian approval delay
The Securities and Exchange Commission and the Financial Industry Regulation Authority (FINRA) jointly released an explanation on crypto broker-dealer approval delays, citing the novelty of digital asset trading. Under the Securities Investor Protection Act (SIPA) of 1970, broker-dealers must have methods of recourse for troubled trades that cannot exist within the realm of digital assets. Until recourse issues are resolved, delays should be expected. As the explanation states:
Whether a security is paper or digital, the same fundamental elements of the broker-dealer financial responsibility rules apply.
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