FINRA Extends Notice Asking Firms to Report Activities Involving Digital Assets | Practical Law

FINRA Extends Notice Asking Firms to Report Activities Involving Digital Assets | Practical Law

FINRA issued Regulatory Notice 20-23, requesting that member firms report their activities involving digital assets, including cryptocurrencies and other virtual coins and tokens. The notice extends until July 31, 2021 a request that would have expired on July 31, 2020.

FINRA Extends Notice Asking Firms to Report Activities Involving Digital Assets

Practical Law Legal Update w-026-4991 (Approx. 4 pages)

FINRA Extends Notice Asking Firms to Report Activities Involving Digital Assets

by Practical Law Corporate & Securities
Published on 14 Jul 2020 • USA (National/Federal)
FINRA issued Regulatory Notice 20-23, requesting that member firms report their activities involving digital assets, including cryptocurrencies and other virtual coins and tokens. The notice extends until July 31, 2021 a request that would have expired on July 31, 2020.
On July 9, 2020, FINRA issued Regulatory Notice 20-23, 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's original request, which was issued in Regulatory Notice 18-20 in July 2018, was set to expire on July 31, 2019, before being extended until July 31, 2020 by Regulatory Notice 19-24 (see Legal Update, FINRA Asks Firms to Report Activities Involving Digital Assets). Regulatory Notice 20-23 now extends the request until July 31, 2021.
Since 2018, FINRA has made efforts to engage with member firms about their activities relating to digital assets, 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 extending their request 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.