U.S. self-regulatory organization, the Financial Industry Regulatory Authority (FINRA), has fined and suspended an investment adviser over undeclared cryptocurrency mining activities.
According to a letter of acceptance, waiver and consent published by FINRA on June 10, Kyung Soo Kim had been working at Merrill Lynch and was registered with the watchdog as a general securities representative through the firm from March 2014.
However, in December 2017 – the month bitcoin reached its all-time high of $20,000 – Kim formed a company called S Corporation to engage in crypto mining activities.
He also struck a deal with another firm to build and operate computer hardware and software for the mining effort, and transferred funds to that firm to pay for its services.
However, Kim failed to provide written notice of the mining venture to his employer at the time, Merrill Lynch, thus breaking two of FINRA's rules, numbered 3270 and 2010.
These specify that business activities outside the FINRA-registered employment must be declared in writing, and that FINRA-associated individuals must "observe high standards of commercial honor and just and equitable principles of trade."
As a result, the agency has fined Kim $5,000 for the infraction and suspended him from association with any FINRA-registered firm for one month.
Bitcoin mining miniatures image via Shutterstock
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