FINRA Considering Changes to Crypto Regulations to Better Protect Investors: Report

The self-regulatory body is primarily concerned with rules around advertising and disclosure to customers.

AccessTimeIconJan 20, 2022 at 10:26 p.m. UTC
Updated Jan 20, 2022 at 10:49 p.m. UTC

Michael Bellusci is CoinDesk's crypto payments reporter.

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.


Read more about

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Michael Bellusci is CoinDesk's crypto payments reporter.

CoinDesk - Unknown

Michael Bellusci is CoinDesk's crypto payments reporter.

Investing in the Future of the Digital Economy
October 18-19 | Spring Studio, NYC