There is a very fine line here - where do we draw the boundary for what an issuer can and cannot do with the assets created? If I purchase an asset, and then lose the key to my address where it is stored, depending on what securities regulation exists, I should be able to get a new asset from the issuer. But if I cannot prove I own that address (cant sign with a key Ive lost), what guarantees can I give the issuer that the asset was in fact lost? If the asset issuer could invalidate the tokens in that address with a lost key, they must have the ability to invalidate the asset in *any* address. It might be the guy I just sold it to, and I never lost the key at all.
This is where P2SH/multisig comes into play. Let's say there is a service provider and a customer. When opening a new account (...), three keys are created:
- A) the customer's very private key
- B) the customer's other key
- C) and a key held by the service provider
A script can be created such that tokens or coins are spendable, if:
- the customer signs with key A
- or the service provider and the customer sign with key B and key C
The later would serve as fail safe for the exceptional case where the customer loses access to his key A, while at no point there is risk that the service provider escalates its privileges.