FINRA Fines, Suspends Investment Adviser Over Undeclared Mining Activities

The Financial Industry Regulatory Authority (FINRA), a U.S. self-regulatory organization, has suspended and fined an investment adviser over undeclared cryptocurrency mining activities.

FINRA published a letter of acceptance, waiver, and consent on June 10, stating that Kyung Soo Kim had been employed by Merrill Lynch and was registered with the watchdog as a general securities representative through the company from March 2014.

However, in December 2017—the time when bitcoin hit its all-time high of $20,000—Kim established a firm dubbed S Corporation to facilitate mining activities.

He also inked a partnership with another company to set up and operate computer software and hardware for the mining initiative and moved funds to that company to pay for its services.

Kim failed to issue a written notice regarding his crypto mining venture to Merrill Lynch, his employer at the time, violating two of FINRA’s regulations, numbered 2010 and 3270.

Business activities aside from the FINRA-registered employment must be professed in writing. In addition, FINRA-associated individuals must “observe high standards of commercial honor and just and equitable principles of trade.”

Therefore, the regulator has fined Kim $5,000 for the breach and suspended him from affiliation with any FINRA-registered company for one month.