Regulators in the U.S. have analyzed the public communications of crypto-related companies and found that 70% of their communications 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. In particular, 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 in various formats related to crypto assets published by Web3-industry representatives were analyzed.
Ira Gluck, Senior Director at FINRA, said during the Unscripted podcast that the potential harm caused by problematic communications is growing along with the capitalization of the crypto market and the general public’s interest in digital assets. He noted that crypto businesses should clearly describe the features of digital assets and the risks associated with them in public communications.
Last year, FINRA conducted a massive survey and found that 55% of U.S. citizens aged 18 and younger chose cryptocurrency as their first financial investment.
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