FINRA Requests Broker-Dealers to Provide Advanced Notice of Cryptocurrency Use

The Financial Regulatory Authority, Inc. (FINRA) has requested that U.S. broker-dealers inform the regulator if they intend to use digital assets such as cryptocurrency. 

FINRA has been slow to grow comfortable with the uncertainties of digital assets as both FINRA and the Securities and Exchange Commission (SEC) have struggled with figuring out whether they are considered securities and how to regulate their use. In this way, the regulators are aware of the use of such alternative currencies in advance and can track their use. 

Guidance for Digital Asset Regulation

In July 2018, FINRA launched a notice requesting “associated persons or affiliates, currently engaged, or intends to engage in any activities related to digital assets, such as cryptocurrencies and other virtual coins and tokens”. 

Nearly a year later on June 27, FINRA and the SEC held an open forum for broker-dealers and discussed compliance practices and the challenges faced by the cryptocurrency market. 

FINRA Sends Voluntary Notice Request

Whether investors or brokers believe digital currencies are securities is irrelevant, FINRA urges firms to report the use of digital assets.

According to the notice, FINRA wants to encourage communication between the organization and broker dealers with the intention of finding out about the use of digital assets prior to the beginning of the business process. SEC regulators have also requested information from investor advisors who use digital assets.

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Dimond Kaplan & Rothstein, P.A. has vast experience representing investors who have lost money as a result of securities fraud or other investment-related disputes.

If you are looking for a securities fraud attorney to review your rights and options, the securities fraud lawyers at Dimond Kaplan & Rothstein, P.A. represent individual and institutional investors who have lost money as a result of securities fraud or stockbroker misconduct.  We will aggressively pursue claims to recover your losses or damages.

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