The regulator announced it would investigate cryptocurrency-related companies to delve into how they manage retail communications. In January, regulators from Singapore, the UK, and Spain tightened their regulations through stricter requirements for marketing messages at crypto companies.
The FTX collapse has led to many reactions due to its adverse effects on the prices of most crypto assets. Many investors and analysts have lost confidence due to numerous recent events in the industry.
Many companies and venture capitalists have suffered losses due to the crash of FTX. The situation worsened considerably as more entities increased their exposure to the cryptocurrency exchange.
Due to the fall of FTX, regulators in various jurisdictions have expressed their sentiments. The circumstances surrounding Sam Bankman-Fried, the CEO of FTX, and his trading platform Alameda Research triggered those reactions.
The Financial Industry Regulatory Authority (FINRA), a US self-regulatory organization, has moved around the current situation. They have investigated retail communications from companies regarding their crypto products and services.
The FINRA Investigates Crypto Companies regarding Retail Communications
The American regulator officially announced that it would launch an investigation into cryptocurrency-related companies. It aims to delve into how they have managed retail communications from early July to late September.
The regulator initiated the investigation to determine whether any retail crypto products and services had fake advertising. During the successful bullish run, FTX was among the most prominent promoters of cryptocurrencies.
The FINRA has explained that it would investigate crypto companies by analyzing any handwritten or electronic message issued within 30 days. Furthermore, the regulator said it would include videos, mobile apps, social networks, websites, and written submissions.
Upon announcing the investigation, the regulator requested that 25 firms provide information for each personal communication. These would include their posting date and evidence of filing with the advertising regulation department of the FINRA.
They will also show evidence that a principal at the firm approved the communication and that they mentioned tokens or crypto services in it.
Crypto Advertising Meets No Regulatory Standards, Raising Considerable Concern
The sudden increase in crypto advertisements in various regions raised considerable concern among regulators, as most do not meet regulatory standards. Many highlighted the potential gains from investing in cryptocurrencies as they hid related risks.
In early 2022, regulators like Singapore, the UK, and Spain tightened their regulations, setting stricter requirements for marketing messages at crypto companies. The collapse in the crypto market also led some countries to introduce restrictions on cryptocurrency advertising.
Steph Curry, Tom Brady, and Larry David, among other celebrities that promoted FTX, now face a class action lawsuit. Regulators charged them with advertising the fraudulent scheme of the FTX cryptocurrency exchange.
Meanwhile, FTT is trading at around USD 1.45 and has accumulated a 7.1% loss over the last 24 hours. While its daily trading volume is above USD 16.87 million, its market capitalization is USD 0, according to CoinDataFlow.
Investors should research FTT or any other cryptocurrency before buying it to learn about its all-time high, behavior, and possible future price. That allows them to make better investment decisions and avoid the loss of money.
By Alexander Salazar
