Matthew Comstock of our FinTech & Blockchain Practice and a former Branch Chief of the SEC’s Division of Trading and Markets, provides an analysis of the Joint Statement issued this week by FINRA and the SEC regarding broker-dealer custody of digital asset securities in a blog post from our Blockchain Law Center.
Mr. Comstock’s blog posting details the key points that the Staffs make in their note, including that broker-dealers’ digital securities activities may not involve custody and that broker-dealers must keep records of customers’ digital securities in their possession and control. The post also covers areas that the Joint Statement does not note, such as how a broker-dealer could establish custody of digital securities on the blockchain. Comstock was also quoted in an article in Reuters saying “that other solutions for custodying securities, such as holding those securities in a wallet controlled by the broker-dealer through private keys, face a more difficult path to approval.”
To read Mr. Comstock’s full analysis, please go to our Blockchain Law Center.