A former employee of Merril Lynch was fined USD 5,000 by the Financial Industry Regulatory Authority (FINRA) when it was observed that the employee’s crypto mining activities did not conform with associated rules.
Kyung Soo Kim, the fined employee signed a letter of acceptance, waiver and consent. This is in accordance with the documents signed on 10 June:
“FINRA Rule 2010 requires associated persons to observe high standards of commercial honor and just and equitable principles of trade.”
Kim was fined as he failed to inform FINRA about his setting up of separate ventures for mining while he was still employed in December 2017. Along with the fine, Kim will also be barred from associating with any FINRA firms for the duration of one month.
FINRA’s slightly ambiguous rule on professional conduct provided it with further grounds to penalize Kim.
This move clearly sends the message that the local crypto miners need to be cautious. What may seem insignificant, can get the attention of the US regulators, which would force them to face similar (if not worse) consequences. However, there is still ambiguity as to whether or not FINRA will continue its pursuit of catching the perpetrators.
As reported earlier, the vagueness of crypto terminology standards hinders a global regulatory response for most jurisdictions. The Securities and Exchange Commission (SEC) in collaboration with FINRA is planning to hold National Compliance Outreach Program for Broker-Dealers on June 27, 2019. The program is designed to analyze the current regulatory risks in the market and promote an effective compliance structure for the protection of investors from the same.
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