The U.S. Financial Industry Regulatory Authority (FINRA) has announced that it is beginning to review retail communications among cryptocurrency firms.
The US over-the-counter (OTC) enforcement agency is interested in the period from July to September, when the most significant events in the industry took place. The FINRA check was prompted by the situation around the bankrupt FTX crypto exchange.
Any written communication, including electronic communication, that is distributed to an audience of more than 25 people within a 30-day period is designated by FINRA as “retail communication”. This also applies to social networks, mobile applications, video hosting sites and websites. In the business environment, it is generally accepted that retail communication is internal communication among managers in a company’s team.
FINRA is going to require crypto companies to provide explanations for each individual message – the date when it was first published, whether it was submitted to the department’s advertising regulation department, whether the company’s CEO approved the message and what crypto assets or services it refers to.
Moreover, FINRA wants to know about any contracts entered into with third-party contractors that disseminate information, as well as what information the contractors have about the company’s target audience.
The purpose of the regulator is to check whether the advertising of cryptocurrency products or services contained false information that could harm private investors.
Previously, the Bahamas Securities Commission (SCB) transferred all of the assets of the failing FTX to a state-controlled wallet, bypassing the FTX bankruptcy proceedings launched in the United States.
Source: Bits
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