U.S. regulators analyzed public communications of crypto companies and found that 70% of them mislead users by creating inflated expectations about digital assets.
The Financial Industry Regulatory Authority (FINRA) reported that about 70% of crypto companies’ messages to the general audience violate public communication rules. Specifically, they contain false, exaggerated, promissory, unwarranted, and misleading claims.
FINRA began a review of public communications of crypto companies in November 2022, after the collapse of the crypto exchange FTX. Over 500 messages of various formats related to crypto-assets published by Web3 representatives were analyzed.
During the Unscripted podcast, Ira Gluck, Senior Director at FINRA, said that the potential harm caused by problematic communications is growing along with the crypto market cap and the general public interest in digital assets. He noted that crypto businesses should clearly describe the features and risks of digital assets in public communications.
Last year, FINRA conducted a massive survey and found that 55% of U.S. citizens aged 18 and younger chose crypto as their first financial investment.
