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.”

We have identified potential violations of FINRA Rule 2210 (Communications with the Public) in 70% of crypto asset communications we reviewed, according to a report published today on the results of a targeted exam. Learn more ▶️ https://t.co/ApN5EZibOD pic.twitter.com/CFlFICQozS

— FINRA (@FINRA) January 23, 2024

According to Gluck, crypto-related communications could range from a podcast to an ad spot in the Super Bowl. Violations potentially included misleading claims on crypto and misrepresenting how the protections of federal securities laws apply to digital assets. FINRA added that the targeted exam provided crypto firms with questions to consider in their public communications.

Related: FINRA adds crypto assets section to its annual oversight report

FINRA launched the review on crypto-related public communications following the collapse of FTX  in November 2022. Before its bankruptcy, the crypto exchange had one of the most prolific marketing campaigns that recruited celebrities, sponsored sporting venues, and featured former CEO Sam Bankman-Fried in several media appearances.

As a non-governmental regulator, FINRA is empowered by the United States Congress to oversee specific areas related to investor protection. The regulator has worked with the Securities and Exchange Commission to approve broker-dealer licenses for crypto firms and penalized others for violating guidelines.

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