December 2, 2020

Volume X, Number 337

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FINRA Issues Regulatory Notice on Digital Assets

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.

Copyright © 2020, Hunton Andrews Kurth LLP. All Rights Reserved.National Law Review, Volume X, Number 202
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About this Author

Scott H. Kimpel Capital Markets and Securities Practice Hunton Andrews Kurth Washington, DC
Partner

Scott brings in-depth knowledge of SEC policies, procedures and enforcement philosophy to each representation.

Scott regularly advises clients across a broad sector of the economy facing sensitive reporting, compliance and enforcement matters before the Securities and Exchange Commission and other capital markets regulators. His practice encompasses a wide range of matters involving the securities laws, mergers and acquisitions, corporate governance, regulatory enforcement, administrative law and public policy. Scott also leads the firm’s working group on blockchain and distributed...

202-955-1524
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