Approximately forty broker-dealer applications from cryptocurrency startups have been waiting for approval from the Financial Industry Regulatory Authority, CoinDesk writes. The agency has been slow to act on new broker-dealer licenses, and some companies claim it is holding off approvals due to the lack of guidance from the SEC.
FINRA manage the approvals for broker-dealers—companies that buy and sell securities. If a company wishes to become a qualified custodian and alternative trading system (ATS), it needs to obtain a broker-dealer license first.
Many have been already waiting for well over a year without receiving any response from the regulator, CoinDesk writes. Some believe there has been an “unofficial moratorium” set on these approvals, while others believe FINRA has been ordered by the SEC to withhold them. Still others maintain that there is nothing unexpected in such delays as crypto assets are still a relatively new asset class.
Despite the morass, a few companies managed to get approvals from FINRA last year. FINRA accepted applications from four ATSs, OpenFinance, tZERO, SharesPost and Templum Markets, allowing them to list digital asses. “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,” said FINRA director of media relations Ray Pellecchia.
Because of the regulator's slow action, companies are considering leaving the U.S. and setting up in other countries to avoid a continued waiting period and uncertain regulatory future.