Finra watching crypto assets, brokers in 2024
The Financial Industry Regulatory Authority Inc. on Tuesday issued its annual roundup of concerns related to the retail wealth management industry, and in an update, the securities industry self-regulator said it was adding developments in “crypto assets” to its laundry list of major concerns for the brokerage industry.
Finra has focused on crypto assets, the broad term for digital assets, in past reports; in 2023, its report mentioned the crypto-asset market in the context of cybersecurity. But in this year’s report, the “2024 Finra Annual Regulatory Oversight Report,” Finra said it was keeping tabs on salespeople and financial advisors who are involved in the marketing and sale of digital assets.
“Finra has identified associated persons engaged in a range of crypto asset-related activities through [outside business activities] or [private securities transactions,]” according to the 90-page report, including “proprietary trading, operating investment funds that invest in crypto assets, selling private placements or crypto asset offerings, and participating in crypto mining operations.”
Securities regulators, including the Securities and Exchange Commission, have warned steadily about the potential risks of investing in crypto assets. Broker-dealers in the past have shied away from allowing their financial advisors to invest directly in bitcoin and other such digital assets.
The signal by Finra that it has “identified” financial advisors and salespeople tied to digital assets comes as the SEC is expected to make a decision on approving spot bitcoin exchange-traded funds. If approved, many believe such ETFs would be a boon for digital investors. Exchange-traded funds that invest in bitcoin futures have already been
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