Blockchain Legal Resource

As part of its ongoing effort to supervise broker-dealers conducting transactions in digital assets, FINRA recently issued Notice 20-23. The Notice encourages FINRA members to continue to keep FINRA updated on a firm’s activities relating to digital assets that have not been previously disclosed.

Examples of the types of activities of interest to FINRA include the following:

• purchases, sales or executions of transactions in digital assets;
• purchases, sales or executions of transactions in a pooled fund investing in digital assets;
• creation of, management of, or provision of advisory services for a pooled fund related to digital assets;
• purchases, sales or executions of transactions in derivatives tied to digital assets;
• participation in an initial or secondary offering of digital assets (e.g., ICO, pre-ICO);
• creation or management of a platform for the secondary trading of digital assets;
• custody or similar arrangement of digital assets;
• acceptance of cryptocurrencies from customers;
• mining of cryptocurrencies;
• recommending, soliciting or accepting orders in cryptocurrencies and other virtual coins and tokens;
• displaying indications of interest or quotations in cryptocurrencies and other virtual coins and tokens;
• providing or facilitating clearance and settlement services for cryptocurrencies and other virtual coins and tokens; and
• recording cryptocurrencies and other virtual coins and tokens using distributed ledger technology or any other use of blockchain technology.

The Notice applies to activities conducted through July 31, 2021.