FINRA Ends Regulatory Unclarity By Awarding Harbor with Crypto Broker-Dealer License

Alo Kingsley   Sep 28, 2019 21:22 (41).jpg

The Financial Industry Regulatory Authority (FINRA) awarded Harbor Square Investments a broker-dealer license. Harbor Square Investments is a subsidiary of a tokenized securities platform, Harbor. The news of the awarded license can be confirmed on FINRA’s BrokerCheck web service.

This move breaks the rather lengthy stand-off between the crypto firms and the regulatory bodies. The FINRA and the US Securities and Exchange Commission (SEC) previously outlined factors for considering agencies when determining the approval of a broker-dealer application. It explained that broker-dealers must comply with established laws and practices regarding losses or theft of security. These were however not available or effective in certain digital assets. The undue risks investors would face were the regulatory bodies’ concerns for the delayed licensing of many crypto firms.

The broker-dealer award affords a firm the ability to buy and sell securities for themselves or on behalf of their clients. Broker-dealers who treat digital assets as securities could market them to institutional investors. However, the strict requirements of FINRA and SEC regulate and restrict this. Harbor’s CEO explained that this was a new territory for the regulatory bodies. Hence, the time spent was required to enable them to understand the implications of the license and do it right.

With this broker-dealer award settled, Harbor plans to move things forward to become a one-stop-shop for digital assets issuers. It plans to provide technology to manage investors, raise funds, tokenize and enable liquidity. These processes were quite difficult prior to its licensure as the firm could not make partner broker deals without it. The firm was prohibited from handling other key processes like performing due diligence.

The broker-dealer license is a pathway for the firm to sail in all its businesses seamlessly.


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