FINRA reminded broker-dealers to notify their FINRA Regulatory Coordinators in writing if they, or their associated persons or affiliates, are currently engaging in or intend to engage in activities related to cryptocurrencies, virtual coins or tokens.
FINRA issued a similar request in 2018, which was due to expire on July 31, 2019. In order to promote "ongoing" communication regarding digital asset activities, the new Regulatory Notice requests firms to continue reporting their digital assets activities until July 31, 2020.
The scope of activities for which FINRA is requesting disclosures includes, among other things, activities related to:
-
transactions in (i) digital assets, (ii) pooled funds investing in digital assets and (iii) derivatives (e.g., futures, options) tied to digital assets;
-
"participation in an initial or secondary offering of digital assets (e.g., ICO, or pre-ICO)";
-
"creation or management of a platform for the secondary trading of digital assets";
-
"acceptance of cryptocurrencies (e.g., bitcoin) from customers";
-
"mining of cryptocurrencies";
-
"clearance and settlement services for cryptocurrencies and other virtual coins and tokens"; and
-
"recording cryptocurrencies and other virtual coins and tokens using distributed ledger technology or any other use of blockchain technology."
FINRA notes that the request for information regarding digital asset activities is in addition to any required regulatory filings relating to digital assets that are "securities" (e.g., submission of a Continuing Membership Application in the case of a material change in business operations).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
