FINRA says regulations still apply in Metaverse
The Financial Industry Regulatory Authority (FINRA), a non-governmental, self-regulatory organization, recently published a report outlining regulatory implications for securities and financial firms operating in the metaverse.
Along with a breakdown of the state of Metaverse activity in the financial industry and future predictions of the technology, FINRA also decided to remind businesses of several paragraphs of the report that the rules and applicable government regulations apply to their activities in the Metaverse. Otherwise they would.
FINRA announces publication of its comprehensive Metaverse report on X.com. Source: FINRA
In a report released on October 24, the authority said, “Member organizations should be mindful of the potential impact on their regulatory obligations when considering incorporating MetaVas into their internal systems and processes or using this technology in product offerings.”
Odd chance
According to the report, global revenue “opportunity” could reach $800 billion by 2024 and “is expected to contribute more than $3 trillion to global gross domestic product (GDP) by some by 2031.”
While Metaverse technology often focuses on gaming and industrial applications, FINRA has investigated a number of financial industry issues, including data visualization, digital twins and virtual trading. He identified a number of challenges facing the Metaverse industry in general and financial use cases in particular.
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Chief among the challenges identified is security and privacy. As the term “metaverse” is somewhat nebulous and covers multiple technology positions, ensuring certain platforms meet the regulatory needs of financial institutions, brokers and distributors is critical to smooth adoption, the report said.
FINRA notes that despite the experimental nature of many trading projects in Metaverse, those efforts still fall under the same legal restrictions and requirements as other communications in the financial services industry.
According to the report:
“FINRA reminds its member firms that the FINRA rules—intended to be technology neutral—and securities rules generally, will continue to apply if member firms use Metaverse in the course of their business, just as they apply when member firms use any other technology or tool. The use of any technology does not exempt companies from their regulatory obligations.
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