The CEO of the Financial Industry Regulatory Authority (FINRA) said the self-regulatory body will look at potential changes to crypto regulations this year as crypto adoption grows, Barron’s reported, citing a virtual conversation with Securities Industry and Financial Markets Association (SIFMA) CEO Kenneth Bentsen Jr. on Wednesday.
CEO Robert Cook said FINRA isn’t looking at making wholesale changes to current rules, but instead is planning to issue “an early-stage, concept release type of notice,” especially in the context of advertising and disclosure.
“We’re not looking to regulate or fundamentally change the regulatory structure here,” Cook said during the webcast, according to Barron’s. “That’s above our pay grade – that’s the SEC, other federal regulators, Congress, figuring out what is the appropriate rules of the road here.”
But Cook expressed concern that the range of regulators overseeing the various types of crypto assets could create confusion among investors.
“Our member firms today are involved in the sale of some digital assets – some securities, some not securities,” Cook said. “And when customers interface with one of our members and then buy a cryptocurrency or buy a digital asset, there are disclosure rules that apply today.”
Cook added that “we want to take this opportunity to talk about those [rules] and also to see if there are additional enhanced requirements that ought to apply, so that when people buy a product that’s not regulated…they may not know that they’re kind of flipping out of the broker-dealer regime into a different regime because they’re dealing with the same broker-dealer.”
Cook said that FINRA plans to publish its examination priorities for this year within the next month.
In October, FINRA advised its members handling crypto assets to ensure they had appropriate know-your-customer controls and processes to remain in compliance.
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