- About 40 crypto-related companies are waiting for the registration.
- FINRA delays the decision due to uncertainty on part of the SEC.
The Financial Institutions Regulatory Agency (FINRA) has been delaying the decisions on 40 cryptocurrency startups applications for broker-dealer licenses.
The regulator makes the companies waiting for so long due to an unofficial regulatory moratorium on applications from companies engaged in a cryptocurrency-related business, experts believe. Some of them suspect that FINRA is waiting for the US Securities and Exchange Commission(SEC) to provide clear guidance on how the digital assets are qualified under the US legislation.
It is worth noting that the SEC issued various guidelines to help companies define the legal status of digital assets. However, specific regulatory standards are yet to be developed.
Meanwhile, some analysts emphasize that the delay is natural as cryptocurrencies are still a relatively new class of assets that require thorough consideration and risk analysis. Apparently, this point of view is shared y FINRA:
“Membership applications from firms proposing to engage in digital asset businesses present new, complex issues and we are in the process of working through them.”
Some of the companies have been waiting for approval from FINRA more than a year. Further delays may force these companies to seek a more crypto-friendly jurisdiction.
It is important to emphasize that FINRA is a non-profit private organization that approves broker-dealers and issues licenses for individuals to represent these firms. Technically, FINRA is entitled to approve only broker-dealers, but not qualified custodians. The agency itself is under the control of the SEC.
Last year FINRA requested all broker-dealers to provide a detailed report on their involvement in the cryptocurrency industry.
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