FINRA Wants to Know All About Member Firms' Crypto Activities

A U.S. self-regulatory body for broker-dealers is requesting member firms to submit a wide range of details relating to their cryptocurrency-focused activities.

In a regulatory notice issued on Friday, the Financial Industry Regulatory Authority (FINRA) said the requested information will supplement its existing efforts to "ascertain the extent of its member firms' involvement" in the nascent space.

According to the notice, FINRA wants to know if a member firm has been or will be trading cryptocurrency, accepting it from customers, managing a pooled crypto fund, participating in a token sale, or offering advice on any crypto-related topic.

Also notably, cryptocurrency mining – earning rewards for participating as a node in a blockchain to record transactions – or "any other use of blockchain technology" are areas that FINRA has indicated interests in for its monitoring purpose.

The organization went on to say:

"Until July 31, 2019, each firm is encouraged to keep its Regulatory Coordinator updated if it, or its associated persons or affiliates, begins or intends to begin, engaging in a new type of activity relating to digital assets not previously disclosed."

Authorized by the U.S. Congress in 2007, FINRA was incorporated as a self-regulatory organization with the remit to approve and supervise broker-dealers in the country.

Although the new regulatory notice is not mandatory, it follows FINRA's existing efforts to scrutinize member firms amid rising concerns of "fraud and other securities law violations involving digital assets," FINRA said in the notice.

Last year, the body issued a warning to retail investors to remain cautious after a number of public companies saw spiking stock prices following claimed blockchain and cryptocurrency pivots.

FINRA image via Shutterstock