US regulator FINRA has asked crypto companies to turn over “all their individual communications” between July 1 and September 30 this year. The self-regulatory body made the announcement on Friday. The move came as FINRA tightened its crypto marketing practices in the wake of the tumultuous collapse of crypto exchange giant FTX. Here are the details…
FINRA requests information from cryptocurrency companies
FINRA, a US self-regulatory agency for brokerage services, has taken a step towards cryptocurrencies. He said he was “conducting a review of firm practices.” According to the announcement, crypto firms are required to maintain all their individual communications regarding crypto assets distributed between July 1 and September 30 this year. This includes any written (including electronic) communication. He also notes that “video, social media, mobile apps, and websites often fall under this category of communication.”
In addition, companies were asked to provide other written instructions such as “compliance policies, guides, training materials, compliance bulletins” for the relevant period. Regulatory “reviews” aim to gather information to find appropriate regulatory responses for the crypto industry. FINRA made the announcement after the $32 billion crypto exchange FTX crashed. The announcement comes just days after the stock market crash affected thousands of investors and the entire crypto market.
FINRA’s announcement came after FTX crash
The fall of FTX is seen as the worst event in the crypto industry, along with the explosion of LUNA in May. As we reported on Kriptokoin.com, it’s been almost two weeks since FTX stopped all withdrawals and tried to negotiate a bailout with Binance. Since November 7, crypto investors have withdrawn about 220,000 Bitcoins from the exchange. Token holders on exchanges exposed to FTX are ramping up their efforts to withdraw their funds.
Some businesses exposed to the platform have already suspended withdrawals for fear of liquidity. Some platforms that have nothing to do with FTX also stopped withdrawals after what happened. Among them are crypto platforms such as Genesis, AAX. The crypto exchange’s troubles first began earlier in the month when it was revealed that the exchange’s native token, FTT, made up the majority of the balance sheet of Alameda Research, FTX’s sister firm, also founded by Sam Bankman-Fried.
This, combined with Binance’s decision to sell all of its FTT holdings, triggered a massive sell-off. It then led to a liquidity crunch on one of the largest crypto exchanges. Earlier this year, FINRA said it was investigating some changes in crypto regulations amid the industry’s rapid growth. The regulator stated that it is not trying to “fundamentally change the regulatory structure” of crypto. He said he intended to publish an “early stage, concept-oriented statement” specifically in terms of advertising and disclosure.
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