The Financial Industry Regulatory Authority (FINRA) is responsible for monitoring the activity of brokerage companies as well as the exchange markets in the United States. The failure of the FTX Group, on the other hand, has compelled the regulatory body to investigate retail communications in the cryptocurrency asset market in order to gather more data.
According to a statement made by FINRA, the organization is seeking information from a variety of sources, including websites, social media platforms, promotional films, and mobile applications. As a consequence of this, businesses are subject to the expectation that they would submit compliance and training manuals in conjunction with the reviews and approval procedures that they employ for their day-to-day operations.
On the website of this organization, it was stated that "FINRA, for example, conducts "sweeps," or targeted assessments like the current one, to obtain information that it can use to nail down a response to issues." However, in order to "lessen the regulatory expenses," the FINRA only investigates a select number of companies at a time.
On a more global scale, the most recent action taken by FINRA was prompted by the failure of several of the major cryptocurrency exchanges in the world. FTX is the most recent company to suffer a loss.
In addition, the Financial Industry Regulatory Authority (FINRA) intends to investigate FTX in conjunction with other cryptocurrency companies' commercials directed at retail customers that were shown during the most recent Super Bowl. The regulatory authority is conducting this investigation in order to have a better understanding of the communication procedures utilized by crypto service providers.
The FTX Disaster and the Stability of the Crypto Market
One of the most important players in the industry at the time, the FTX cryptocurrency exchange had a market capitalization of $32 billion before it suffered a catastrophic collapse. In addition to this, the company's chief executive officer, Sam Bankman-Fried, is widely recognized as a prominent figure in the ecosystem of virtual assets due to the fact that he is one of the most influential decision-makers in the sector.
The crash of his exchange on November 9 occurred at the same time as a significant decline in the price of bitcoin, which fell by 3% of its value. In the space of just a few days, the value of a number of digital assets has nosedived, erasing more than one billion dollars from the market and ushering in the onset of yet another crypto winter.
The digital asset category of stablecoins experienced some imbalance in its otherwise stable position as a result of the FTX scandal, so they are not exempt from its effects. As a direct consequence of this, the cryptocurrency industry is currently experiencing a state of disbelief and fear.
It has been reported that Bitcoin holders are attempting to move a significant portion of their funds away from exchanges. This indicates a selling sentiment among Bitcoin holders who wish to dispose of their assets.
Increased efforts are being made by token holders on exchanges that are vulnerable to FTX to withdraw their funds. Some companies that are vulnerable to the problematic platform have already stopped making withdrawals out of fear of losing access to liquidity.
Francis Precious 1 y
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