FINRA Flags Violations in 70% of Broker-Dealers' Crypto Communications
From the desk of Jim Eccleston at Eccleston Law
During a two-year-old targeted examination, the Financial Industry Regulatory Authority (FINRA) has identified potential violations in 70 percent of broker-dealers' communications about cryptocurrencies.
FINRA reviewed over 500 crypto asset-related retail communications from its broker-dealer member firms, aiming to ensure compliance with FINRA Rule 2210, which mandates fair and balanced presentations with a sound basis for evaluating facts when financial advisors and their firms communicate with the public. AdvisorHub reported that the examination revealed violations, including failure to explain product and service offerings, false statements about crypto, and inadequate explanations of how crypto assets are issued, held, transferred, or sold.
While FINRA did not disclose specific firms, it noted that a few were responsible for most of the potentially violative communications. The regulator indicates that this targeted exam may not conclude its scrutiny of broker-dealers' crypto communications.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
Tags: eccleston, eccleston law, finra