The Financial Industry Regulatory Authority (FINRA), a US regulator, recently revealed that nearly 70% of crypto-asset-related public communications reviewed had significant violations. This discovery highlights the challenges and risks associated with communication in the fast-growing but still largely unregulated crypto-currency sector.
FINRA's investigation and its troubling results
FINRA has carefully scrutinised more than 500 communications on crypto-assets since November 2022. The findings are clear: a large majority of these communications, 70%, violated established standards for public communications. Infringements included false statements, unrealistic promises and misleading information. These dubious practices pose a major risk to the investment community and to the image of the industry itself, underlining the pressing need for greater regulation and supervision.
Consequences and repercussions for the crypto-currency sector
These revelations highlight the urgent need for stricter regulation in the crypto-currency sector. Transparent and ethical communication is essential to preserve investor confidence and ensure the stability of this fast-growing market. Crypto-currency companies and platforms must adopt responsible communication practices to avoid potentially heavy penalties and to maintain trust and credibility with their users.
Implications for market operators
The current situation, highlighted by FINRA's report, underlines the need for rigorous compliance with communication standards in the crypto-currency sector. Firms and platforms in the sector are being called upon to review their communication practices to avoid breaches. This means better training, greater transparency and, above all, scrupulous compliance with the established rules. Ultimately, it is the reputation and long-term viability of the entire crypto-currency sector that is at stake.
