The SEC and FINRA issued a joint statement: some issues still need to be resolved before the approval of the encryption company to become a broker-dealer

In a joint statement on Monday, the US Securities and Exchange Commission (SEC) and the US Financial Industry Regulatory Authority (FINRA) explained the reasons for delaying the approval of encrypted custodians. They said they still need to solve some problems before approving the encryption company's application to become a broker-dealer. According to the statement, established laws and practices have greatly facilitated the ability of broker-dealers to comply with customer protection rules in the event of loss or theft of securities, but these laws and practices may not be valid for certain digital assets. Although the broker can prove that he owns the private key of the encrypted wallet, it may not be possible to prove that no other entity has a copy of the private key and that the digital asset can be transferred without the broker's consent. In addition to the private key issue, the statement also discusses why digital assets may not meet SIPA's requirements for digital securities. In addition, other issues revolve around the preservation and reporting rules of records. The joint statement is a response to questions from market participants. According to previous reports, some start-ups have been waiting for approval for at least a year, some of which have been waiting for 14 months, but have not seen any action by FINRA.