US regulator FINRA has asked crypto firms to hand over “all retail communications” between July 1 and Sept. 30 this year, the self-regulatory body announced Friday. The move comes as FINRA cracks down on crypto marketing practices following the tumultuous downfall of crypto exchange giant FTX.
FINRA Seeking Retail Communications Data From July to September-end
The Financial Industry Regulatory Authority (FINRA), a US regulator of brokerage firms and exchange markets, has requested crypto firms to provide retail communications data in the period from July 1 to Sept. 30, FINRA announced earlier this week. Apart from written communications data, FINRA also asked for “video, social media, mobile apps, and websites.”
“Retail Communication” is defined in FINRA Rule 2210(a)(5) as “any written (including electronic) communication that is distributed or made available to more than 25 retail investors within any 30 calendar-day period.”
Furthermore, the companies were also asked to provide “compliance policies, manuals, training materials, compliance bulletins” as well as any other written instructions related to communications for the relevant period. Also, the companies must hand over any contracts or other written agreements between them and related affiliates.
FINRA Looking to Improve Crypto Regulation as FTX Contagion Spreads
The regulator’s “targeted exams” are meant to collect information and conduct investigations in a bid to come up with proper regulatory responses for the crypto industry. FINRA made the announcement just a few days after the $32 billion crypto exchange FTX crumbled, affecting thousands of investors as well as the entire crypto market.
The FTX’s fall is seen as the worst event in the crypto industry alongside LUNA’s implosion in May. Since Nov. 7, when FTX halted all withdrawals and attempted to strike a rescue deal with Binance, crypto investors withdrew around 220,000 bitcoins.
The crypto exchange’s woes first began at the start of the month, when it was revealed that its native token, FTT, makes up the majority of the balance sheet of Alameda Research, FTX’s sister firm also founded by Sam Bankman-Fried. This, coupled with Binance’s decision to sell all FTT holdings, triggered a massive sell-off and led to a liquidity crunch at one of the biggest crypto exchanges.
Early this year, FINRA said it was exploring certain changes to crypto regulations amid the industry’s rapid growth. The regulator said it wasn’t seeking to “fundamentally change the regulatory structure” of crypto but rather issue “an early-stage, concept release type of notice,” particularly in terms of advertising and disclosure.
This article originally appeared on The Tokenist
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