FINRA Extends Request for Firms to Report Activities Involving Digital Assets | Practical Law

FINRA Extends Request for Firms to Report Activities Involving Digital Assets | Practical Law

FINRA issued Regulatory Notice 21-25 to continue encouraging member firms to report their activities involving digital assets, including cryptocurrencies and other virtual coins and tokens.

FINRA Extends Request for Firms to Report Activities Involving Digital Assets

Practical Law Legal Update w-031-8425 (Approx. 3 pages)

FINRA Extends Request for Firms to Report Activities Involving Digital Assets

by Practical Law Corporate & Securities
Published on 09 Jul 2021 • USA (National/Federal)
FINRA issued Regulatory Notice 21-25 to continue encouraging member firms to report their activities involving digital assets, including cryptocurrencies and other virtual coins and tokens.
On July 8, 2021, FINRA issued Regulatory Notice 21-25, extending FINRA's request that member firms inform their risk monitoring analyst if the firm, associated persons, or affiliates are engaged in activities involving digital assets, including cryptocurrencies and other virtual coins and tokens. FINRA originally made its request in July 2018, and has continued to extend it on an annual basis for the previous two years. The most recent extension, made in Regulatory Notice 20-23, was set to expire on July 31, 2021. FINRA is now further extending its request and encouraging firms to report activities involving digital assets on an ongoing basis.
FINRA has made efforts to engage with member firms about their activities relating to digital assets since 2018, including:
  • Conducting a survey of firms' current and planned activities related to digital assets.
  • Requesting firms to inform their risk monitoring analyst of their current and planned activities related to digital assets.
As the area of digital assets continues to evolve and present regulatory challenges, FINRA is encouraging ongoing reporting to keep the lines of communication with member firms open. The activities of interest to FINRA include, but are not limited to:
  • Purchasing or selling of digital assets.
  • Purchasing or selling pooled funds that are invested in digital assets.
  • Creating or providing management or advisory services for pooled funds invested in digital assets.
  • Purchasing derivatives tied to digital assets.
  • Participating in initial or secondary offerings of digital assets.
  • Creating or managing a platform for the secondary trading of digital assets.
  • Accepting cryptocurrencies from customers.
  • Mining cryptocurrencies.
  • Providing clearance and settlement services for cryptocurrencies.
  • Using blockchain or other distributed ledger technologies (DLT) for recording cryptocurrency transactions.