Brokerages Should Report Crypto Activity Pronto, FINRA Says

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By Andrew Ramonas

The Financial Industry Regulatory Authority is curious about what brokers are up to in the cryptocurrency space.

Brokerages should “promptly” tell FINRA about any current or planned involvement with virtual currency and other digital assets if they haven’t done so already, according to a July 6 notice from the self-regulatory organization. Firms should give FINRA updates about any previously undisclosed information about their crypto engagement until July 31, 2019.

The organization is interested in work related to crypto sales, payments, and mining, among other activities.

The notice came after FINRA president and chief executive officer Robert Cook said in January that his organization’s goals for 2018 included learning more about initial coin offerings, which raise money by selling digital tokens they create. FINRA oversees more than 3,700 brokerages.

“The market for digital assets, such as cryptocurrencies and other virtual coins and tokens, has grown significantly and has increasingly been of interest to retail investors,” the notice said. “At the same time, investor protection concerns exist, including incidences of fraud and other securities law violations involving digital assets and the platforms on which they trade.”

To contact the reporter on this story: Andrew Ramonas in Washington at aramonas@bloomberglaw.com

To contact the editor responsible for this story: Seth Stern at sstern@bloomberglaw.com

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