The United States Financial Industry Regulatory Authority, or FINRA, has once again invited itself to the digital assets oversight party for at least another year. Specifically, on July 9, FINRA published “Regulatory Notice 20-23,” which encourages broker-dealers to notify their assigned FINRA risk monitoring analyst as to whether they, their affiliates or their associated persons conduct, or intend to conduct, digital asset activity, including non-securities activity.
The expansiveness of this request cannot be overstated. From associated persons who buy and sell Bitcoin (BTC) in their free time to affiliated non-FINRA members that engage in separately regulated non-securities digital asset activities, all are requested to report to FINRA. The request not only expands FINRA’s regulatory reach beyond its securities mandate but, more importantly, beyond its expertise.