Rule

Read

Nearly 70% of crypto communications violated FINRA’s guidelines, a recent survey says. 
The American Financial Industry Regulatory Authority (<a href="https://crypto.news/tag/finra/" target="_blank" rel="noreferrer noopener">FINRA</a>) has just published a detailed <a href="https://www.finra.org/rules-guidance/guidance/targeted-examination-letters/sweep-update-jan2024" target="_blank" rel="noreferrer noopener">report</a> on a survey of 500 retail communication channels related to cryptocurrencies. According to the findings, published in Jan. 2024, approximately 70% of communications since late 2022 have violated FINRA’s Rule 2210, a rule that governs <a href="https://crypto.news/tag/broker/" target="_blank" rel="noreferrer noopener">broker</a>-dealer communications with the public. 
While FINRA did not disclose who exactly violated the rule, the regulator noted that some firms “failed to clearly differentiate in communications, including mobile apps, between Crypto Assets offered through affiliates or third parties and those offered directly by the member.” 
<blockquote class="wp-block-quote"> 
 “This update does not create new legal or regulatory requirements or new interpretations of existing requirements, nor does it relieve firms of any existing obligations under federal securities laws and regulations. Rather, this update poses questions for firms to consider as they review and supervise their retail communications concerning Crypto Assets.” 
 FINRA 
</blockquote> 
 You might also like: <a href="https://crypto.news/cftc-to-focus-on-defi-market-to-address-potential-risks/"> CFTC to focus on DeFi market to address potential risks </a> 
Moreover, FINRA identified instances where firms made “false statements or implied” that cryptocurrencies function like cash. Additionally, some firms failed to provide a “sound basis” for evaluating cryptocurrencies, as well as misrepresented that the protections of federal securities laws or FINRA rules applied to crypto. 
In a related context, a previous <a href="https://crypto.news/social-influence-and-fomo-drove-crypto-investors-among-new-investors-in-2022/" target="_blank" rel="noreferrer noopener">report</a> from FINRA in May 2023 highlighted that new investors in the crypto market were more likely to be influenced by their friends’ suggestions than those venturing into the equities or bond markets. 
The survey found that over 30% of new crypto investors cited “friend suggestion” as their primary motivation for investing in the novel digital asset. That’s compared to just 8% for first-time equities or bond investors, suggesting that there’s a social element to cryptocurrency investing that’s not evident in traditional markets. 
 Read more: <a href="https://crypto.news/elon-musk-crypto-tweets-social-media-moved-market-2023/"> Top crypto tweets of 2023: how social media moved the market </a>

FINRA says majority of crypto communications violate investor protection guidelines

crypto.news

Other articles published on Jan 24, 2024

Solana Meme Coin Dogwifhat (WIF) Overtakes Top 300 With Jaw-Dropping 56% Rise

Can Speed and Decentralization coexist in Blockchain?

Solana’s Innovative Leap: Introduction of Token Extensions

Pushd (PUSHD) Has Crypto Whales On Its Side: Bitcoin (BTC) and Ethereum (ETH) Losing Value Rapidly

With $7 Billion Under Management, Bitcoin Friendly Cathie Wood Reveals Her Latest Views On BTC Af...

Bitcoin Miner Core Scientific Announces Post-Bankruptcy Comeback to Return to Nasdaq

Join our free newsletter for daily crypto updates!