The U.S. regulator launched the review on crypto-related public communications following the collapse of FTX in November 2022.
The Financial Industry Regulatory Authority (FINRA) reported that roughly 70% of crypto-related communications from a survey contained “false, exaggerated, promissory, unwarranted or misleading” claims or otherwise violated guidelines on public communications.
In a report released on Jan. 23, FINRA said it reviewed more than 500 crypto asset-related retail communications starting in November 2022. According to the regulator, it identified more than 70% of the reviewed communications that had “potential substantive violations” of its rules on communications with the public.
“With the growth in this market and increased interest in crypto assets, the potential harm caused by problematic communications has also increased,” said FINRA senior director Ira Gluck. “In order to have enough information to evaluate a crypto asset investment or service, communications need to clearly describe its risks and features.”