FINRA Publishes Supervisory Expectations For Crypto Asset Retail Communications

In recent guidance, the Financial Industry Regulatory Authority (FINRA) published the results of its targeted examination or "sweep" of crypto assets retail communications distributed or issued by its member firms, finding that 70% of the sampled communications contained potential violations of FINRA Rule 2210, which requires communication with the public to be fair and balanced, among other things. In issuing this guidance, FINRA outlined questions firms should be asking themselves—and that FINRA will itself ask in an examination—when they engage in such communications.

FINRA's definition of crypto assets (also known as digital assets) encompasses all "assets that are issued or transferred using distributed ledger or blockchain technology." While many crypto assets are not securities, and therefore do not directly fall under FINRA's purview, the sale of or engagement in crypto assets as a business line by a FINRA member firm brings that activity well within