Summary
FINRA conducted a sweep on crypto asset communications, despite lacking regulatory authority over non-securities crypto assets. The sweep found potential violations of advertising rules, raising questions about FINRA’s understanding of the complex industry. This intrusion into non-securities crypto asset regulatory space has negative implications for FINRA members and potential applicants. The sweep’s findings highlight FINRA’s imprudent attempt to oversee non-securities crypto assets, causing unnecessary burdens on broker-dealers and hindering new member applicants with crypto asset affiliates. Until FINRA abandons this misguided approach, market integrity and the investing public will continue to suffer.
Key Points
1. FINRA lacks regulatory authority over non-securities crypto assets, yet continues to show interest in its members’ activities in this area.
2. The recent Crypto Assets Communications Sweep by FINRA consumed significant time and resources, but the findings were lackluster and highlighted the regulator’s struggle to understand the industry.
3. FINRA’s intrusion into the non-securities crypto asset regulatory space has discouraging implications for current members and those seeking membership, as it creates unnecessary burdens and hinders innovation in the industry.