The U.S. Financial Industry Regulatory Authority (FINRA) will consider potential tightening of cryptocurrency selling rules, according to its chief, Robert Cook, as reported by Barron’s.
The priority for the regulator overseeing the broker-dealer industry will be the advertising of digital asset services and disclosure.
According to Cook, FINRA does not plan to make radical changes to the rules, but will issue notices outlining what standards exist and how they should evolve to better protect investors, he said.
“We are not going to regulate here or fundamentally change the regulatory structure. This is beyond our scope. SEC, other federal regulators, Congress — they set the rules of the game”, said the CEO of FINRA.
He expressed concern that the range of crypto assets is broad enough to be covered by different regulatory frameworks. In his view, this could lead to investor confusion and, likely, brokers will need to update their disclosure policies.
In this area, FINRA intends to consider additional requirements that should apply when individuals purchase an unregulated product without realizing it.
“It’s kind of a switch from one broker-dealer regime to another, because they’re dealing with the same firm”, emphasized Cook.
He noted that in 2022 much of FINRA’s activity will be focused on protecting retail investors in light of their recent influx into the markets.
In 2021, the regulator fined the crypto-friendly online broker Robinhood a record $70 million, of which $12.6 million went to compensate users. FINRA accused the company of providing clients with “false or misleading information”.
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