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Aaron Washington advises clients on a broad range of regulatory and compliance matters arising under federal and state securities laws and self-regulatory organizations (SRO) rules. His practical and innovative counsel is informed by his experience as assistant general counsel of a leading securities firm and more than six years as counsel with the U.S. Securities and Exchange Commission (SEC).

The delay has subsided with custody of digital asset securities by special purpose broker-dealers (SPBDs). By way of background, on July 8, 2019, SEC and FINRA staff issued a joint statement addressing how registered broker-dealers could facilitate transactions in digital asset securities without taking custody of the assets. The solution involved bilateral clearance and settlement of the transactions.

A year later, the SEC’s Division of Trading Markets staff issued a no-action letter to FINRA articulating the staff’s position on how alternative trading systems (ATSs) could facilitate trading in digital asset securities using a three-step process. However, per its terms, the no-action letter requires the ATSs to not take custody of the digital asset securities.