The Financial Industry Regulatory Authority (FINRA) has fined TradeStation Securities $85,000 for distributing misleading retail communications about crypto asset services.
FINRA Fines TradeStation Securities for Misleading Crypto Communications
FINRA stated that between July and September 2022, TradeStation issued promotional materials across its website, emails, and social media platforms that failed to clearly state that crypto assets were not offered through TradeStation itself but through an affiliated entity.
The affiliate was not a FINRA member or registered broker-dealer.
According to FINRA, some communications gave the impression that TradeStation directly offered cryptocurrencies, listing them alongside regulated assets like stocks and ETFs.
The regulator argues that a video posted online claimed TradeStation “allows you to buy, sell, and trade many types of stocks, ETFs, and several cryptocurrencies,” without clarifying that crypto services were provided by a separate, unregulated affiliate.
Additionally, several materials reportedly lacked a balanced presentation of the risks and benefits of crypto investing, falling short of FINRA’s requirements for fairness, transparency, and adequate disclosure under Rule 2210.
FINRA concluded that TradeStation’s conduct violated multiple provisions, including FINRA Rules 2210(d)(1)(A), 2210(d)(1)(B), 2210(d)(3), and Rule 2010, which requires member firms to maintain high standards of commercial honour.
TradeStation has neither admitted nor denied the findings but consented to the fine and a censure as part of a settlement. The affiliate in question has since ceased offering crypto assets, and the firm has stopped distributing related communications.
