FINRA’s Friendly Reminder Towards Firms to Keep Regulators Updated of Crypto Activities
Back in 2018, FINRA first revealed an initiative in which member firms had to notify of their current and planned activities involving crypto activities (i.e. cryptocurrencies and any other forms of digital assets). In particular, the former requested that said communication should be made as an ongoing effort.
As for the notifying of activities, this supposedly falls under the issuance of Regulatory Notice 18-20, in which firms are supposed to update the Regulatory Coordinator in terms of their involvement in cryptocurrencies, as well as those that are deemed non-securities.
Keeping constant updates was supposed to last until July 31, 2019. However, this has since been extended until July 31, 2020.
Consequences that Arise from Failing to Abide by FINRA
News outlet, Bits Online, also reported on this matter and has since disclosed that member firms that have failed to abide by FINRA have had severe consequences. The example of Arthur Breitman, Co-Founder of Tezos, was provided in which the former issued a fine of USD$20,000 to the latter.
The justification for such a fine stems from Breitman’s failure to disclose details regarding Tezos while working at Morgan Stanley roughly four to five years ago. In addition to the fine, Breitman was not allowed to associate with broker dealers for two years.
Ultimately, it is evident that FINRA is on the watch and businesses should consider the disadvantages that arise from not complying.