US Financial Industry Regulator Spotlights Crypto in Annual Report

The United States financial industry watchdog cautions individuals to exercise caution before entering cryptocurrency, citing the ongoing presence of malicious scammers.

“Member firms seeking to engage in crypto asset-related activity should identify and address the relevant regulatory and compliance challenges and risks,” the report stated.

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.

Read more: How To Make Money With Cryptocurrency: Top 4 Ways In 2024

Alarming Annual Volume of Crypto Theft

Meanwhile, BeInCrypto recently reported that anti-scam platform Scam Sniffer revealed the alarming volume of crypto stolen in 2023. This was due to increasingly sophisticated phishing scams.

“In the past year, Scam Sniffer has monitored these Wallet Drainers stealing nearly 295 million US dollars in assets from about 324,000 victims.”

However, while hacking attacks have a widespread impact, the community usually responds quickly, usually within 10-50 minutes.

Meanwhile, Scam Sniffer notes that airdrops, organic traffic, paid advertising, and hijacked Discord links are not as easily detected.

Read more: What Is a Rug Pull? A Guide to the Web3 Scam

The post US Financial Industry Regulator Spotlights Crypto in Annual Report appeared first on BeInCrypto.

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