US Financial Industry Regulator Spotlights Crypto in Annual Report

FINRA Declares Crypto is Exposed to ‘Manipulative Schemes’

The Financial Industry Regulatory Authority (FINRA) has released its 2024 annual report outlining its comments on different sectors of the reporting requirements for the regulator. This includes financial crime, firm operations, communication and sales, market integrity and financial management.

However this year, FINRA also includes crypto asset developments.

The report highlights the ongoing involvement of malicious hackers and scammers in the space. Additionally, explaining that they will exploit low market-cap assets to deceive investors.

“Bad actors are taking advantage of investor interest in crypto assets and blockchain technology by engaging in manipulative schemes similar to those that exist in the equities market, including those that are commonly associated with low-priced securities.”

However, the regulator pointed out that disparities between centralized and decentralized exchanges may provide an advantage to malicious actors as well.

“Additional forms of market abuse involving crypto assets may result from differences in their market structure,” the report highlighted.

Chainalysis recently brought attention to a prevalent in the crypto industry — approved phishing scams. In this scheme, a malicious actor deceives the victim into approving a malicious blockchain transaction.