A major regulatory body monitoring brokerage firms and exchange markets reports that approximately 70% of communications regarding cryptocurrency may have breached its regulations related to fairness and balance with the public.
FINRA, under the supervision of the SEC, examined its member firms and found several common issues.
These issues included misleading statements suggesting that cryptocurrencies operate similarly to cash, inaccurate comparisons of crypto to other assets like stocks, and misrepresentations regarding the relevance of federal securities laws or FINRA rules to cryptocurrency, according to a Tuesday report.
FINRA examined 500 retail communications to determine compliance with its rules, which mandate broker-dealer communications to be “fair and balanced” and prohibit claims that are “exaggerated, promissory, unwarranted, or misleading.” The report revealed that a few firms had the majority of potential violations.
FINRA examines various forms of written content, including print ads, and extends its scrutiny to diverse mediums like a 90-minute podcast or a 15-second Super Bowl commercial, as mentioned by Gluck in a recent FINRA episode.
Regulatory bodies like the SEC and Commodity Futures Trading Commission have also intensified their attention on the cryptocurrency space, with recent enforcement actions targeting major crypto exchanges and firms.
Also Read: FINRA Tightens Grip on Crypto in 2024 Oversight Report
